Special agents arrested two Indio-area residents today on felony charges involving filing false state income tax returns and negotiating fraudulent refund checks, the Franchise Tax Board announced.
Alfredo R. Gutierrez, 51, of Indio, and Otto H. Ludwig, 32, of La Quinta, were arrested on felony charges of filing false state income tax returns and negotiating fraudulently obtained state income tax refund checks.
Gutierrez is the owner and operator of GC Services aka Gutierrez Consulting Services, a tax preparation service. Ludwig is Gutierrez' nephew, and works as a tax preparer. According to FTB special agents, Gutierrez and Ludwig allegedly filed more than 200 returns for clients claiming false or inflated child and dependent care credits during 2000 - 2002. These returns generated false state income tax refunds of $93,680. The duo benefited by the larger customer base the scheme generated for the business.
In one case, a return prepared by Gutierrez showed the taxpayer filed as head of household and claimed the child and dependent care credit. During an interview with FTB special agents the taxpayer stated he was married and his wife took care of their children. The taxpayers' copies of the returns do not list the fraudulent claims.
The scheme was discovered by FTB's internal fraud detection process. The investigation involved numerous interviews with the affected taxpayers. Each tax count carries a maximum term of three years in state prison.
Gutierrez and Ludwig were booked into the Riverside County Indio Jail Facility. Each individual's arraignment is typically scheduled within 48 hours.