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U.S. citizen running tax business in Costa Rica sentenced for fraud



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Published on Monday, March 25, 2024
By the A.M. Costa Rica wire services




A male U.S. citizen surnamed McGonigle (67), a former tax preparer in Orange County in the United States, was sentenced to 120 months, equivalent to 10 years, in federal prison for leading a multi-year tax fraud gang in Costa Rica.


According to the U.S. Attorney's Office, McGonigle in Costa Rica and two more countries, claimed more than $10 million from the IRS and dozens of state tax authorities in fraudulent tax refunds and led these authorities to lose more than $1.2 million.


Some McGonigle IP addresses were traced back to Costa Rica, where law enforcement surveillance and travel records confirmed that he and his co-conspirators opened an office and hired employees to help file additional fraudulent returns.


McGonigle was sentenced by United States District Judge James V. Selna, who also ordered him to pay $1,230,175 in restitution. 


Judge Selna also ordered that the $300,000 McGonigle previously paid to be free on bond in this case be applied to the restitution order.


After an eight-day trial, a jury found McGonigle guilty of one count of conspiracy to defraud the United States, one count of conspiracy to commit wire fraud, and one count of aggravated identity theft.


McGonigle recruited others to help convince the IRS and dozens of state governments to issue millions of dollars in fraudulent tax refunds.

To perpetrate the massive fraud that began in 2013 and lasted until McGonigle’s arrest in 2019.





According to the case, McGonigle sent one co-conspirator to Thailand to obtain fake identification documents that used stolen victim identities, and then he directed other co-conspirators to use those fake identifications to obtain prepaid debit cards, as well as numerous commercial mailboxes across Orange County and elsewhere.

After sending the prepaid debit cards to these untraceable mailboxes, McGonigle and his co-conspirators filed fraudulent tax returns using the identity theft victims’ Social Security numbers. Those fraudulent tax returns sought millions of dollars in tax refunds to be deposited into these prepaid debit cards or other bank accounts that they controlled.

With more than a decade of tax preparation experience in Southern California, McGonigle used his knowledge to lead the fraud scheme. The IP addresses used to file the fraudulent returns were traced back to various cities in Southern California, including McGonigle’s home in Fallbrook and various office spaces leased by McGonigle in Lake Forest, Costa Mesa, Fountain Valley, and Carlsbad.

McGonigle’s scheme fraudulently sought more than $10 million from federal and state tax authorities and caused an actual loss of $1,230,175. Prosecutors have secured guilty pleas from two co-defendants, who are also scheduled to be sentenced in the coming months.

IRS Criminal Investigation, Homeland Security Investigations, and the United States Postal Inspection Service investigated this matter. The Missouri Department of Revenue and the U.S. Secret Service provided substantial assistance during the investigation.

Assistant United States Attorneys Sue Bai of the Terrorism and Export Crimes Section and Colin Scott of the General Crimes Section prosecuted this case.

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What have you heard about expats suspected of tax evasion in Costa Rica?  We would like to know your thoughts on this story. Send your comments to news@amcostarica.com



  


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