TUCSON – LAWFUEL – US Law News – Luis C. Deguzman, Jr., 68, of Palm …

TUCSON – LAWFUEL – US Law News – Luis C. Deguzman, Jr., 68, of Palm Springs, Calif., was sentenced in Tucson by United
States District Court Judge David C. Bury to 48 months in prison to be followed by 3 years of supervised release for conspiracy to defraud the United States with respect to claims for income tax refunds. He was also ordered to pay the Internal Revenue Service $416,965 in restitution. Deguzman was found guilty by a federal jury on
June 14, 2006 after a 7-day trial. Defendant remains in the custody of the U.S. Marshals Service.

The evidence during the trial showed Deguzman conspired to defraud the U.S. with respect to claims
for individual income tax refunds.

Several of Deguzman’s clients reported him to the IRS which triggered the
investigation conducted by the Criminal Investigation Division of the Internal Revenue Service in Tucson, Ariz.
with the assistance of the Fraud Detection Unit at the Internal Revenue Service Center in Austin, Texas.

In the scheme, clients were told that Deguzman could obtain large income tax refunds to be placed in a trust for the future benefit of their family and a charity of their choice. In the promotion of the fraudulent
charitable trust scheme, he attempted to defraud the IRS of $455,985.00 and secured fraudulent tax refunds of $416,965.00.

Deguzman claimed to clients that he was a tax attorney and had a large staff at his company,
Senior Resource Services, as well as hundreds of clients internationally and numerous offices throughout southern California and New York City. He also claimed he had connections with the IRS which permitted him
to gain special approval to use a loophole in the tax code in order to fund a charitable remainder trust for clients.

Deguzman prepared the alleged trust documents and the client’s tax return. Without the client’s
knowlege, he inflated the charitable contributions to 1/2 of the adjusted gross income (the legal limit for
charitable deductions) and sometimes added other false deductions, such as moving expenses and mortgage
interest. When they asked, clients were told that with a “blind trust” they could not get copies of the tax returns.

The clients would receive large tax refunds (approximately 80% of taxes withheld) of which they would send 1/2 to a trust for the client’s family and a designated charity 20 years in the future.

As the trustee in charge of the trust, Deguzman would sometimes change the direct deposit routing number to have the entire tax refund sent to the accounts he controlled.

He would then divert the monies for his benefit and that of his then-girlfriend and co-conspirator. Of the $416,965 in fraudulent tax refunds, approximately $389,000 went to Deguzman and his company. Evidence at trial showed that more than $67,000 of the money went to pay his credit cards,$26,000 was cash withdrawals, nearly $7,000 went to pay the mortgage
of the co-conspirator; and over $15,000 to the defendant’s children.

The prosecution was handled by Danny N. Roetzel, Assistant U.S. Attorney, District of Arizona, Tucson, Arizona.
RELEASE NUMBER: 2006-214(Deguzman)

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