Victorville man found guilty of tax fraud scheme that spanned three continents

Rene Ray De La Cruz, Victorville Daily Press
·2 min read
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A Victorville man, who previously worked as an Orange County tax preparer, was convicted of federal criminal charges for leading a multi-year tax fraud conspiracy.
A Victorville man, who previously worked as an Orange County tax preparer, was convicted of federal criminal charges for leading a multi-year tax fraud conspiracy.

A Victorville man who previously worked as an Orange County tax preparer was convicted of federal criminal charges for leading a multi-year tax fraud conspiracy.

Authorities reported that illegal activity by 66-year-old Stephen Jake McGonigle spanned three continents and claimed more than $10 million from the IRS and dozens of state tax authorities, the Department of Justice reported Tuesday.

McGonigle was found guilty of one count of conspiracy to defraud the U.S., one count of conspiracy to commit wire fraud, and one count of aggravated identity theft.

A federal jury returned the guilty verdicts on McGonigle after an eight-day trial.

According to evidence presented during the trial, McGonigle recruited others, including two co-defendants who previously pleaded guilty, to help convince the IRS and dozens of state governments to issue millions of dollars in fraudulent tax refunds.

Thailand connection

To perpetrate the massive fraud scheme that began in 2013, McGonigle sent one co-defendant to Thailand to obtain fake identification documents that used stolen victim identities, and then he directed co-conspirators to use those fake identifications to get prepaid debit cards, as well as numerous commercial mailboxes across Orange County and elsewhere, according to the DOJ.

After sending the prepaid debit cards to these untraceable mailboxes, McGonigle and his co-conspirators filed fraudulent tax returns using the identity theft victims’ Social Security numbers.

Those fraudulent tax returns sought millions of dollars in tax refunds to be deposited into these prepaid debit cards or other bank accounts that they controlled.

Costa Rica connection

With more than a decade of tax preparation experience in Southern California, the DOJ reported that McGonigle used his knowledge to lead the fraud scheme.

The IP addresses used to file the fraudulent returns were traced back to various office spaces leased by McGonigle and to Costa Rica, where law enforcement surveillance and travel records showed that McGonigle and his co-conspirators opened an office and hired employees to help file additional fraudulent returns.

Scheduled sentencing 

U.S. District Judge James V. Selna scheduled a March 4, 2024 hearing, when McGonigle will face a statutory maximum sentence of 22 years in federal prison.

Prosecutors have secured guilty pleas from two co-defendants, who are also scheduled to be sentenced in the coming months.

IRS Criminal Investigation, Homeland Security Investigations, and the U.S. Postal Inspection Service investigated this matter. The Missouri Department of Revenue and the U.S. Secret Service provided substantial assistance during the investigation.

Assistant U.S. Attorneys Sue Bai of the Terrorism and Export Crimes Section and Colin Scott of the General Crimes Section are prosecuting this case.

This article originally appeared on Victorville Daily Press: Victorville man found guilty of massive tax fraud scheme