Deena Vang Lee, Tax Evasion and Identity Theft, California 2023

In a shocking turn of events, Deena Vang Lee, a 41-year-old former IRS employee, has been found guilty of three counts of wire fraud, two counts of aggravated identity theft, five counts of preparing and presenting false and fraudulent returns, and three counts of making and subscribing a false and fraudulent tax return.

The scheme, which lasted from 2012 through 2016, saw Lee willfully prepare and file tax returns for other individuals that contained materially false and fraudulent statements and underreported her taxable income on her personal tax returns.

Lee, who operated a tax preparation business, would put false information on the customer’s tax return without their knowledge or consent and submit the returns to the IRS. As part of this scheme, Lee obtained the identification of multiple individuals and falsely listed these individuals as child care providers on multiple customer’s tax returns without their knowledge or consent.

Lee also underreported her own income related to the payments she received for tax preparation services on her personal tax returns for tax years 2013, 2014, and 2015.

U.S. Attorney Phillip A. Talbert announced the verdict, stating that the jury found Lee guilty of willfully preparing and filing tax returns for her clients that were false and underreported her own taxable income.

Lee faces a maximum statutory penalty of 20 years in prison and a $250,000 fine for each of the wire fraud counts; three years in prison and a $250,0000 fine for each of the preparing and presenting false returns counts; three years in prison and a $250,000 fine for each of the making and subscribing a false tax return counts; and a two-year consecutive mandatory minimum sentence for the aggravated identity theft counts.

Lee is scheduled to be sentenced by U.S. District Judge Ana de Alba on May 8, 2023. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

This case is the product of an investigation by the IRS-CI and TIGTA. Assistant U.S. Attorneys Alex Dempsey and Henry Carbajal are prosecuting the case.

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