LOS ANGELES – A Lancaster man pleaded guilty Monday to federal charges stemming from his creation of fake businesses in order to receive illegal tax refunds and unemployment insurance benefits, the U.S. attorney’s office announced.
Carl Steven Artis, 54, entered the plea in Los Angeles to one count each of mail fraud and false claims against the United States government.
Artis admitted he operated the scheme to defraud the California Employment Development Department of unemployment insurance benefits from at least summer of 2010 to last August.
He acknowledged he registered fictitious companies with the EDD, submitted false wage information for people whom he falsely claimed worked for these companies, and then fraudulently applied for and obtained unemployment insurance benefits in the names of these phony employees.
At the same time, Artis obtained social security numbers and dates of birth from persons held in state or federal custody and other individuals whose identities were used as part of the scheme. He then filed fake claims for unemployment insurance benefits for these people.
Contrary to Artis’ submissions to the EDD, none of the individuals ever worked for the fake companies, none ever received the wages that Artis reported to EDD, and none lived at the addresses that were listed on forms filed with the EDD.
Artis submitted approximately 61 false claims to EDD seeking approximately $817,510 in unemployment insurance benefits, resulting in losses to EDD of approximately $498,480.
In addition to the unemployment insurance scheme, Artis defrauded the Internal Revenue Service through the submission of fake tax returns seeking refunds.
In perpetrating the tax fraud, Artis used the identities of people and businesses used in the EDD scheme, authorities said.
For each of the fake taxpayers, Artis generated fictitious W-2 forms in the names of the fake taxpayers, falsely claiming the companies that he invented for the sole purpose of the fraud paid wage income to the fake taxpayers, and falsely claiming that taxes were withheld from the fictitious income in excess of the amount owed.
Artis then caused false tax returns to be filed in the names of the fake taxpayers seeking a tax refund.
From April 2011 to July 2013, Artis filed approximately 83 fraudulent income tax returns with the IRS, falsely claiming a total of $504,118 in tax refunds. The IRS paid out $99,520 in false claims before the scheme was discovered.
Artis is scheduled to be sentenced May 18. The maximum sentence he can receive is 25 years imprisonment and a fine of $500,000. In addition, Artis may be ordered to pay restitution of approximately $598,000.
The investigation and prosecution of Artis was conducted by the U.S. Department of Labor – Office of Inspector General, the State of California Employment Development Department, and IRS Criminal Investigation, in conjunction with the United States Attorney’s Office for the Central District of California.
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[Information via news release from the Internal Revenue Service – Criminal Investigation, Los Angeles Field Office. City News Service contributed to this report.]
Sonya says
I know someone who I believe is running a fake nonprofit organization and a public benefit organization. She is even listed as a charity in the AV but she is one shady lady! Who do I contact?
Eric says
Funnily enough, around 2010-2012, while residing in the Park Circle Apartments (Lancaster, CA) I was approached by another resident, a recent release from prison, obviously coming from a criminal element. At the time I was unemployed, this guy was aware of it, but he came over and made a similar offer.
He had a friend, who in exchange for part of the profits, could set me up with everything to get back money from EDD and IRS. I’ve wondered if it was the same guy.