We are committed to closing California's $6.5 billion tax gap, defined as the difference between tax that is owed and tax that is paid. Our special agents work cooperatively with law enforcement agencies throughout California to uncover illegal behaviors that contribute to the tax gap. These include underreporting income, overstating deductions, failing to file returns, failing to pay taxes due, and making illegal cash payments to employees.
Tax fraud is not a victimless crime. Honest taxpayers are the victims, paying as much as 20 percent more in their taxes due to the tax gap. You can report suspected tax fraud by calling FTB at (800) 540-3453.
Here are some of the cases prosecuted in the past couple of months.
Former benefits clerk doesn't benefit from grand theft, forgery
A Granada Hills woman was sentenced on May 22, to three years in state prison on multiple felony counts of grand theft, forgery, and state income tax evasion.
Maria Isabel Obando, 48, a former benefits clerk, embezzled more than $538,000 from her former employer, a Los Angeles brokerage and money management firm. According to court documents, Obando was employed as the benefits clerk in charge of making payments to the retirement accounts and health care providers for the firm's employees.
Between April and December 2001, Obando abused her position of trust by stealing the benefit checks used to pay employees' health coverage, and depositing them into her personal account. Obando, who had no authority to sign company checks, also presented checks to partners in the firm for their signature, and then altered the information before depositing the checks into her personal account. The scheme was discovered when Obando went on vacation, and another employee received calls from the health care provider concerning unpaid premiums.
Obando also failed to file her 2001 state income tax return. She not only failed to claim her wages, but also failed to report the embezzled funds. All income is taxable, including income from illegal sources.
In addition to the prison term, Obando was ordered to pay restitution to her former employer of more than $556,000, and more than $106,000 to FTB. These amounts represent unpaid tax, penalties, and interest, and the cost of the investigation.
This was a joint investigation between the Los Angeles District Attorney’s Office and FTB.
Bounce house owners bound for jail for tax evasion, money laundering
On June 2, a Highland couple was arrested without incident at their home by FTB special agents, and Riverside County Sheriff Deputies. The couple faces felony charges of filing false state income tax returns, money laundering, and structuring financial transactions.
Raymond Duran, 30, and Lisa Duran, 31, owned and operated "Jump for Us" in Rialto, which rents bounce houses for parties and other events. The couple is charged with four counts of filing false returns, and 12 counts of money laundering. Raymond is charged with two counts of structuring financial transactions.
According to investigators, the couple allegedly failed to report more than $276,000 in income for tax years 2003 and 2004 on their state income tax returns. The Durans also allegedly laundered illegal money through their business and personal bank accounts.
Each felony count of tax evasion carries a maximum state prison term of three years. The couple owes FTB more than $22,500 in unpaid tax.
The Durans were booked into the San Bernardino County Sheriff station on $100,000 bail each.
Used car dealer parked in prison for tax evasion
A Norco man was sentenced on June 8, to 16 months in state prison on three felony counts of state income tax evasion.
James D. Schneider, 41, pleaded no contest in November 2005, in a plea agreement. According to court documents, Schneider agreed to be sentenced to state prison depending upon the amount of restitution he paid to the FTB by May 18, 2006. If he paid $100,000 or more in restitution, Schneider would have received a shorter prison sentence. Schneider paid only $40,000.
Schneider owned and operated The Repo Ranch, Inc., a car dealership, in Fontana. According to investigators, Schneider took more than $1.3 million from his company and failed to file state income tax returns on the more than $119,000 in taxes due for the years 1998-2000.