By Gemma Q. Casas
Variety News Staff

A 44-year-old woman faces up to five years in federal prison for conspiring to submit false claims to the U.S. Internal Revenue Service amounting to $850,000.
U.S. Attorney for the Districts of Guam and the Northern Marianas Leonardo Rapadas said Antonieta Bonifacio Aguon yesterday pleaded guilty in federal court to conspiring to submit false claims.
Assistant U.S. Attorney Timothy E. Moran said Aguon is an employee of POI Aviation, a company engaged in ground handling services for both private and commercial aircraft and an affiliate of Tan Holdings Corp.
Rapadas said Aguon prepared about 275 false returns, resulting in a loss of $850,000 to the federal government.
“Beginning in March of 2006, Aguon began preparing fraudulent United States income tax returns for CNMI residents in order to claim the Earned Income Tax Credit, or EITC. She used online sites, including www.expresstaxrefund.com. Aguon conspired with recruiters, who brought her taxpayer information, including names, social security numbers, bank account information, W-2 Forms and fictitious United States addresses,” said Rapadas in a press conference shortly after the case was unsealed on Thursday morning.
“Aguon charged 5 percent of the tax refund, while the recruiters charged another 5 percent or more. Aguon continued preparing and submitting false tax returns until she was approached by special agents of the Internal Revenue Service Criminal Investigation in April 2007. Over the two-year period, Aguon prepared approximately 275 false returns, resulting in a loss to the United States of approximately $850,000,” he added.
Moran said they began work on the case in April.
CNMI Attorney General Matthew Gregory said Aguon’s activities were first discovered by representatives of the local Division of Revenue and Taxation after receiving inquiries from residents who were being solicited by her agents.
Subsequently, the CNMI government alerted the IRS.
“The commonwealth is pleased that they were able to identify this illegal activity and inform representatives of the Internal Revenue Service,” said Gregory in a statement. “The commonwealth desires to work with United States law enforcement agencies to ensure that tax laws affecting the two governments are aggressively enforced.”
On April 13, the Variety ran a story about the scam based on information from a woman who claimed she got tax refunds but didn’t know that it was illegal.
That person said a group of people in a certain company was offering to process EIC claims for workers in exchange for a 10 percent commission out of the total sum that would be collected from the IRS.
Others, however, got as much as 30 percent deductions from their EIC because the persons that referred them to “the group” that filed their EIC claims online also got a commission for their referrals.
The IRS wired the EIC checks to the claimants’ bank accounts. If the taxpayer did not have a bank account, “the group” also took care of that.
Information about the EITC tax scam was divulged because several workers were not given their money on time.
Federal prosecutors said Aguon’s case should serve as a warning to others who attempt to commit tax fraud in U.S. jurisdictions in the future.
“We are proud to bring the first tax prosecution case in the CNMI. We will not permit criminals to use the CNMI or CNMI residents in tax fraud schemes against the United States,” said Rapadas.
The acting special agent in charge of the Seattle field office for IRS Criminal Investigation, Nick Henley, said the investigation is still ongoing. He did not elaborate.
The federal government’s earned income tax credit program is for low-income workers in the U.S. and does not apply to the Northern Marianas.
“We will not tolerate the predatory abuse of CNMI residents. Our agents stand ready to investigate and help prosecute all who would try to make a fast buck at the expense of unknowing victims,” said Henley.
The 275 taxpayers who received tax refunds from the IRS averaging $3,000 were told to return the money to the IRS .
Henley said the bogus addresses used were mainly in Washington, D.C. and California.
He said over the past three years, only 300 false claims were discovered throughout the U.S. and that the Saipan tax scam was a “significant scheme.”
“We do take it seriously. We want to get the message out…be wary of any scheme that might be suspicious,” he said.
Authorities said, for now, the 275 will be treated as victims but investigations will continue to determine whether or not they should be treated as accomplices.
Some of the victims knew that Aguon would be using bogus addresses to make it appear that they were filing from the mainland U.S.
Sentencing for Aguon has been set for a later date.
Rapadas said the maximum statutory penalties for Aguon’s offense include five years imprisonment; a fine of $250,000 or the greater of twice the loss to the U.S. or gain to the defendant; and a term of supervised release of three years.
Henley reiterated that CNMI residents are not required to file a return with the U.S. IRS and are not eligible to claim the EITC.
He said those who got tax refunds through the tax scheme that Aguon participated in should direct their questions to the U.S. Attorney’s Office in the Horiguchi Building in Garapan where an IRS representative will be available for them on May 11, 12, 14 and 19, from 9 a.m. to 12 noon, and from 1 p.m. to 4 p.m.