Mark Arlin Hammerschmidt, Tax Refund Fraud, MN 2024

Mark Arlin Hammerschmidt, 49, and Ornella Angelina Hammerschmidt, 37, were sentenced today in U.S. District Court in Minneapolis, Minnesota, for masterminding a $2 million income tax refund fraud scheme that preyed on hundreds of vulnerable immigrants. The couple, who operated American Group—a tax and immigration service in Shakopee, Minn., and Winter Garden, Fla.—pleaded guilty on November 16, 2015, and now face federal prison time for their calculated theft from the U.S. Treasury.

From January 2011 to February 2013, the Hammerschmidts used their business to file over 1,000 fraudulent federal and state tax returns. They lured clients with false claims of professional credentials, including Ornella’s outright lie that she was a licensed immigration attorney. In reality, they systematically falsified filing statuses, invented businesses and losses, and fabricated child care and education credits to inflate refunds—all while refusing to sign the preparer section to hide their role.

Many of their victims were non- or limited-English speakers who trusted the couple to handle sensitive tax and immigration matters. Instead, the Hammerschmidts used their clients’ personal information to reroute nearly $200,000 in refund payments to bank accounts and addresses they controlled. The fallout was devastating: clients faced IRS audits, tax debt, and jeopardized immigration status—all while the Hammerschmidts profited from their exploitation.

But the fraud went deeper. Between 2010 and 2012, Mark Hammerschmidt stole personal identification information from hundreds of Guatemalan citizens, including birth certificates and passport copies. He used this data to file for Individual Taxpayer Identification Numbers (ITINs), then submitted years of false federal and Minnesota state tax returns in their names. These returns claimed fake household income, dependents, and education credits to bilk the government out of approximately $1.8 million in fraudulent refunds.

“The Hammerschmidts stole nearly $2 million from the U.S. Treasury and exploited hundreds of vulnerable victims for their own financial gain, causing those victims immeasurable harm,” said Assistant U.S. Attorney Michelle Jones. “The U.S. Attorney’s Office and the IRS will continue to vigorously investigate and prosecute those who seek to victimize others and enrich themselves through tax refund schemes.”

“Most tax return preparers provide excellent service to their clients, however a few unscrupulous ones file false returns,” said IRS Criminal Investigation Special Agent in Charge Shea Jones. “Knowingly falsifying IRS documents is a federal crime. Our agents play a vital role in protecting tax revenue by exposing abusive preparers like Mark and Ornella Hammerschmidt.” The sentencing, handed down by U.S. District Judge David S. Doty, marks the end of a years-long scheme built on deception, identity theft, and betrayal of trust.