A Westminster-based tax preparer was sentenced Monday to one year and one day in federal prison and a year of home confinement for perpetrating a tax scam.
Rosemary Pham, 65, of Midway City, pleaded guilty July 14 to conspiracy to defraud the United States. Prosecutors argued for 37 months in prison.
In addition to the prison time, U.S. District Judge James Selna ordered Pham to pay $2.3 million in restitution.
From 2012 through 2019, Pham was involved in a scheme to avoid paying at least $907,720 in taxes and making at least $470,372 in false claims, prosecutors said in a sentencing brief. Pham and other co-conspirators filed 433 tax returns using pilfered personal identifying information to get tax refunds, prosecutors said.
The scam involved using phony IRS forms in the names of people unaware their personal information was being used, prosecutors said.
Prosecutors said the ultimate tax loss from two schemes amounted to $2.3 million.
“This was an appreciably sophisticated tax evasion scheme, involving the theft and improper use of (personal identifying information) by a civil servant to generate fraudulent deductions for businesses,” prosecutors said. “For the scheme to succeed, tax preparers, like defendant, were essential.”
The scheme was designed to be “undetectable” by the IRS, prosecutors said.
Co-defendant John Tran, a former social worker, was sentenced in September to 57 months behind bars. Selna ordered him to pay $1.1 million in restitution, according to the U.S. Attorney’s Office.
Tran wrote a letter to Selna last week, saying he was “shamefully aware of what I have done.”
“I take full responsibility for my actions and the pain it has caused to the victims and my family,” he said. “I am truly sorry and I understand that I must be held accountable.”
Tran said he turned to identity theft because of his “long-standing gambling addiction. It was relentless; I had tunnel vision, and I lost a lot of close friends as a result. It was this case that made me realize that I must confront my addiction head-on and seek treatment.”
He said he has been in counseling “for years,” and that when he gets out of prison, “I hope to help members of my community who suffer from the same addiction.”
Tran pleaded guilty in November 2019 to conspiracy to defraud the federal government, three counts of mail fraud and a count of aggravated identity theft.
He worked for the Orange County Social Services Administration from July 1994 until October 2018 and stole the identities of clients, including recent immigrants, prosecutors said.
From August 2010 until June 2019, Tran and others used the stolen personal information to file bogus federal and state tax returns and to get welfare benefits as well as opening up credit cards and other lines of credit in their names, prosecutors said.
Tran convinced one victim to let him use his credit card, on which he charged about $14,000, prosecutors said.
Co-defendant Anton Nguyen, 54, of Fountain Valley, who owns a Westminster-based tax preparation business, was sentenced in August to 41 months behind bars and ordered to pay $3.7 million in restitution for his part in the conspiracy.