Fidencio Moreno, Tax Fraud and Bank Home Mortgage Fraud, California 2023

Two San Jose brothers, Fidencio Moreno, 52, and Arturo Moreno, 38, were sentenced to prison for committing tax fraud and bank fraud in a scheme that netted them over $3.3 million in ill-gotten gains. The brothers, who owned a charter bus company, Quality Assurance Travel (QAT), conspired to defraud the United States by failing to report substantial amounts of gross receipts on their federal corporate tax returns and personal income tax returns.

According to court documents, between 2005 and 2010, the Morenos collectively failed to report over $966,908 in gross receipts from QAT. The unreported income consisted primarily of cash receipts paid by passengers that were not deposited into the business bank accounts or disclosed to their tax return preparer.

The brothers also conspired to commit bank fraud and wire fraud by submitting false and fraudulent home mortgage loan applications that overstated their income and assets to acquire and refinance homes in San Jose. In total, they fraudulently obtained more than $3.3 million in home loans, with two financial institutions approving the fraudulent applications and reducing the principal due on the loans.

After falling behind on loan payments, the Morenos attempted to avoid foreclosure by submitting false and fraudulent applications to modify the loans. One of the four properties was ultimately sold via a short sale in 2013, while another was foreclosed upon in 2014, resulting in losses to the financial institutions exceeding $325,000.

Fidencio Moreno was sentenced to serve 41 months in prison and three years of supervised release, while Arturo Moreno was sentenced to serve 28 months in prison and three years of supervised release. The court also ordered Arturo Moreno to pay $422,962 in restitution and to forfeit $3,328,600 and his interest in two pieces of real property.

In a related case, Elena Moreno, 40, the wife of Fidencio Moreno, was sentenced in January 2015 to serve 22 months in prison and three years of supervised release for her role in the conspiracies as a bookkeeper at QAT. The three co-defendants collectively paid more than $200,000 in restitution to the Internal Revenue Service (IRS) for losses associated with their conspiracy to defraud the United States by filing false and fraudulent tax returns.

The case was investigated by special agents of IRS-Criminal Investigation, with Trial Attorney Todd P. Kostyshak of the Tax Division and Assistant U.S. Attorneys Thomas Moore and Katherine Wong prosecuting the case.

Source: https://www.justice.gov/archives/opa/pr/california-charter-bus-company-owners-sentenced-prison-tax-fraud-and-bank-home-mortgage-fraud