Bakersfield Tax Pro Admits Role in $25M Fraud

BAKERSFIELD, CA – Victor Cruz, 40, a tax return preparer operating in Bakersfield, has confessed to his part in a brazen $25 million federal tax refund scheme. Cruz pleaded guilty today, admitting he knowingly assisted Miguel Martinez, an illegally present Mexican national, in filing thousands of bogus tax returns, Acting U.S. Attorney Michele Beckwith announced.

The scheme, operating between November 2019 and June 2023, was spearheaded by Martinez, who systematically exploited stolen identities to fabricate shell companies. These phantom businesses were then used to report false wage and withholding information directly to the Internal Revenue Service. Martinez wasn’t just creating fake companies; he was building a house of cards on the backs of identity theft victims.

Cruz’s role was crucial. He wasn’t a passive participant. Court records show he actively prepared and filed over 500 of these fraudulent returns, collectively claiming more than $3 million in refunds. In exchange for his services, Cruz received ‘thousands of dollars’ in kickbacks from Martinez – a clear demonstration of intent and profit motive. He knowingly put his professional license and freedom on the line for a quick buck.

While the scheme attempted to claim a staggering $25 million, the IRS ultimately paid out $2.3 million before catching on. The investigation, conducted by the IRS Criminal Investigation, revealed the depth of the operation and the meticulous planning involved in attempting to defraud the U.S. government. Assistant U.S. Attorney Joseph Barton is leading the prosecution, determined to see justice served.

Cruz is now facing a statutory maximum sentence of 10 years in federal prison and a $250,000 fine. However, the final decision rests with the court, which will consider sentencing guidelines and other relevant factors before handing down a punishment. He is scheduled to be sentenced on November 17, 2025. This isn’t just about money; it’s about the damage done to those whose identities were stolen and the strain placed on a system already stretched thin.

Martinez, the mastermind behind the scheme, has already pleaded guilty and received a six-year federal prison sentence. This case serves as a stark warning: those who facilitate or participate in tax fraud, regardless of their role, will be held accountable. The Grimy Times will continue to follow this case as it progresses towards sentencing and beyond.