Third Defendant Pleads Guilty to Multimillion-Dollar PPP Loan Fraud Scheme and Tax Fraud Scheme Involving Professional Athletes

National / United States – The Department of Justice Office of Public Affairs reported that a California man pleaded guilty on August 1, 2022, to conspiring with others in schemes to defraud the IRS and the Paycheck Protection Program (PPP), a federal loans initiative designed to help businesses pay their employees and meet expenses during the COVID-19 pandemic.

Thanh Ngoc Rudin, 58, was a principal of Mana Tax Services, a tax preparation business in the Los Angeles region, according to court documents and testimonies. Rudin conspired to commit two types of fraud schemes involving Mana Tax.

Thanh Rudin first colluded with his brother, Quin Ngoc Rudin, as well as Seir Havana and others, from June 2019 through July 2021, to draft and file with the IRS a series of false and fraudulent income tax forms on behalf of at least nine professional sportsmen. False tax returns indicated faked commercial and personal losses in order to obtain refunds that the athletes were not entitled to. The co-conspirators informed the elite athletes that Mana Tax could also edit prior year tax filings to address alleged errors made by the athletes’ previous accountants in order to obtain further refunds that they were not entitled to. The athletes were then assessed a cost of 30% of the resulting return by Mana Tax.

Thanh Rudin and his co-conspirators also used Mana Tax to apply for PPP loans on behalf of several tiny enterprises, including shell entities managed by the co-conspirators with few or no employees and business entities controlled by others. The co-conspirators excessively exaggerated the number of employees and monthly payroll expenditures claimed on the PPP loan applications and submitted fake tax returns in support of the applications to get the PPP loans to which the applicants were not eligible. Mana Tax imposed a fee of 30% of the loan amount obtained in exchange for processing the applications.

The government seized more than $11.8 million from bank accounts containing PPP loan scam earnings held by the conspirators during the inquiry. Furthermore, Havana turned up cashier’s cheques totaling $5.6 million, which represented a percentage of the costs charged to professional athletes for the production of phony tax reports, as well as a portion of the expenses charged for obtaining bogus PPP loans. The combined losses from the two schemes exceeded $25 million.

Thanh Rudin’s sentencing date is set for November 9. He faces a maximum sentence of five years in jail for conspiracy and twenty years for wire fraud. He will also face supervised release, reparations, and monetary penalties. A federal district court judge will impose a sentence after considering the United States Sentencing Guidelines and other statutory circumstances.

Quin Rudin entered a plea of guilty on May 13 to conspiracy to defraud the United States, conspiracy to commit wire fraud, and wire fraud. His sentencing date is set for September 14. Havana entered a guilty plea on July 20 to conspiracy to defraud the United States, conspiracy to commit wire fraud, and money laundering. His sentencing hearing is set for November 9.

The announcement was made by Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division, U.S. Attorney Jessica D. Aber for the Eastern District of Virginia, Special Agent in Charge Wayne A. Jacobs of the FBI Washington Field Office Criminal Division, and Special Agent in Charge Darrell J. Waldon of the IRS-Criminal Investigation’s Washington, D.C. Field Office.

The investigation was assisted by the United States Attorney’s Office for the Central District of California.

The case is being prosecuted by Assistant Chief David Zisserson of the Tax Division and Assistant U.S. Attorneys Kimberly M. Shartar and Kimberly R. Pedersen.