Two Tax Preparers Sentenced

Two Santa Ana tax preparers have been sentenced to prison terms for filing false income tax returns that yielded about $43,000 in refunds, the Internal Revenue Service said Thursday.

Joel Castaneda, 32, was sentenced in federal court in Los Angeles on Tuesday to 18 months in prison and three years’ probation. Able Toledo, 20, was sentenced Wednesday to six months and three years’ probation. Both men were ordered to make full restitution to the IRS.

The men, who operated World Financial Services in Santa Ana, pleaded guilty in January to conspiring to defraud the government and attempting to interfere with the IRS investigation into their business. Castaneda also pleaded guilty to submitting false claims.

A federal indictment said the men prepared two false returns for each client--one for the customer and one for the IRS, then submitted the return with the higher refund claim to the IRS.

When the refund was due, the tax preparers would sometimes accompany the client to the bank, demanding large fees for the refund, said Ellyn M. Lindsay, an assistant U.S. attorney.

“In some instances, the defendants would threaten to withhold the check unless the people paid,” she said.

Although the 14 clients involved were unaware of the scheme, they are being held responsible, along with Castaneda and Toledo, for repaying the excess refunds, plus interest and penalties, Lindsay said.