UPDATE: California Man Who Allegedly Filed ‘False Liens’ In Bizarre Paperwork Attack Against Law Enforcement Claimed IRS Owed Him $82 Billion

A California man accused of filing “false liens” against public officials in pursuit of their duties also filed a “bogus” tax-refund claim with the IRS for the preposterous sum of $82 billion, federal prosecutors said.

Thanh Viet Jeremy Cao and his business, Phoenix Financial Management Group, now have been permanently barred by a federal judge from preparing federal tax returns.

Cao was found in a civil case to have “prepared numerous federal tax returns” for clients, “claiming a total of over $200 million in tax refunds based on false representations of tax withholdings,” prosecutors said.

He filed for a bogus refund of $82 billion “on his own 2009 income tax return,” prosecutors said.

The scheme centered on a “frivolous” theory that the U.S. government established “secret” Treasury Department accounts for citizens in the 1930s and that citizens can “draw” on the accounts to pay their taxes and other debts. The theories sometimes are known as “redemption” or “straw man.”

One part of the bogus theory holds that the “secret” accounts contain enough money to make every American a millionaire and that the accounts can be tapped to satisfy debts, including tax debts. Another part of the theory holds that the secret money can be accessed by filing tax forms, including Form 1099-OID, which is why the fraud also sometimes is referred to as an “OID redemption” scheme

Cao is required to provide the government with a list of people for whom he has prepared tax returns since Jan. 1, 2005, and notify those people of the court’s order, prosecutors said.

A criminal prosecution against Cao is proceeding on a separate track.

See earlier story on Cao’s alleged “false liens” scheme.

About the Author

Comments are closed.