Bakersfield Tax Man Admits $25M Fraud Role

BAKERSFIELD, CA – Victor Cruz, 40, a Bakersfield tax return preparer, has confessed to his central role in a brazen $25 million federal tax refund fraud. Cruz pleaded guilty today, admitting he knowingly aided Miguel Martinez, an illegally present Mexican national, in a scheme that flooded the IRS with bogus claims.

Acting U.S. Attorney Michele Beckwith revealed that from November 2019 through June 2023, Martinez orchestrated the filing of thousands of fraudulent tax returns. The operation relied on stolen identities and the creation of shell businesses, all designed to funnel millions in illegitimate refunds. Martinez didn’t act alone; he needed an insider to legitimize the fraud, and that’s where Cruz came in.

Court records detail how Martinez fabricated wage and withholding information for his phantom businesses, then submitted hundreds of individual tax returns in the names of identity theft victims. These returns falsely claimed employment at the fake companies and demanded substantial refunds. Cruz, far from being a passive participant, actively prepared and filed over 500 of these fraudulent returns, accounting for more than $3 million in claimed refunds. He wasn’t offering a public service; he was selling his expertise to a criminal.

The IRS wasn’t completely fooled, but the damage was substantial. While Martinez and Cruz attempted to claim $25 million in fraudulent refunds, the agency ultimately paid out $2.3 million before catching on. This isn’t a victimless crime – every dollar fraudulently obtained represents money stolen from American taxpayers.

The investigation, spearheaded by IRS Criminal Investigation, has already yielded one conviction. Martinez previously pleaded guilty and received a six-year federal prison sentence. Now, Cruz faces a statutory maximum of 10 years in prison and a $250,000 fine. His sentencing is scheduled for November 17, 2025, but the final penalty will be determined by the court, considering federal sentencing guidelines and other relevant factors.

Assistant U.S. Attorney Joseph Barton is prosecuting the case, signaling a continued federal crackdown on tax fraud and identity theft. This case serves as a stark warning: those who facilitate these schemes, even as seemingly minor players, will be held accountable for their actions. The Grimy Times will continue to follow this case and report on any further developments.