$2 Million Illegal Tax Refunds on Deceased Returns

Los Angeles- Masood Chotani, a Los Angeles county former CPA and tax return preparer that spent the last three years as a fugitive in Pakistan, was arraigned on charges that he conspired to defraud the United States and made false claims for income tax refunds, the Internal Revenue Service (IRS). A federal grand jury in Riverside returned an indictment against Chotani on June 23, 2010. The indictment was unsealed earlier this year.

The Indictment alleges that in 2002 and 2003, Masood Chotani, Ather Ali, of Diamond Bar, and Haroon Amin, of Upland, conspired to file at least 250 false income tax returns with the IRS using names and Social Security Numbers of deceased individuals, claiming more than $2,000,000 in tax refunds.

The indictment further alleges that many of the illegally obtained refund checks were deposited into bank accounts within the Islamic Republic of Pakistan and the Republic of Armenia.

According to court documents, most offenses occurred in SanBernardino, Los Angeles, Orange, Riverside, and Ventura counties. Chotani is also charged with personally preparing and filing two false claims for refund on federal income tax returns.

Trial is scheduled for September 4, 2012. If convicted, Chotani faces a maximum potential penalty of five years’ imprisonment and a $250,000 fine for each count of conspiracy and presenting false claims.

This case is being prosecuted by Assistant U.S. Attorney Charles E. Pell and Trial Attorney Joseph A. Rillotta of the Justice Department’s Tax Division. This case was investigated by special agents of the IRS Criminal Investigation office in Laguna Niguel. The apprehension of Chotani was made with assistance from the U.S. Marshals Service.

An indictment is merely a formal charge by the grand jury. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.