Tax fraud case ends with plea

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Kevin Murphy
Thursday, June 21, 2012

A Williams Bay man who prepared tax returns for fellow immigrants has agreed to plead guilty in federal court to two counts of tax fraud involving his own returns, according to documents filed with the court Wednesday.

According to the 19-page plea agreement filed in federal court in Milwaukee:

Angel Miguel Carbajal, also known as Angel Carbajal Ortiz, was born in Nicaragua and moved to Illinois in 1991. In 1992 he began work as a caretaker at a Lake Geneva area farm. In 1999, he began preparing immigration documents and tax returns for immigrants, preparing thousands of returns in the next several years.

Carbajal, 40, did the bookkeeping and banking for his business, Centro San Miguel. In 2006, CSM opened offices in Williams Bay and Milwaukee.

Carbajal started A&C Concrete Contractors in 2004 and Carbajal was responsible for the business's bookkeeping and banking.

The Internal Revenue Service audited Carbajal in 2008 when he and his girlfriend both listed themselves as head of household for the same address on their separate returns.

The audit revealed Carbajal didn't report income from his CSM business using his Social Security number, and had underreported his A&C income. Carbajal reported A&C's gross receipts at $450,000 in 2006 while bank deposits totaled about $800,000 that year.

Carbajal told the IRS that he used a second Social Security number on returns that listed his income from the farm caretaker job but that income also was significantly underreported.

The IRS also learned Carbajal reported part of CSM income on his brother's return. Carbajal's brother was a full-time student in Illinois and said he wasn't aware what Carbajal had done.

A 2010 search of Carbajal's Theater Road residence yielded business records that the IRS said shows under reported income resulted in a tax loss of $63,000. Carbajal has agreed to pay $136,144 in restitution to cover payment of tax due and penalties and interest for tax years 2006 and 2007.

Carbajal signed the plea agreement June 14. Assistant U.S. Attorney Matthew Jacobs signed the agreement Wednesday and filed it with the court.

Carbajal hasn't been detained and no date has been set for his plea hearing. In exchange for his guilty plea, the government has agreed to recommend Carbajal receive a lesser sentence.

Conviction of tax fraud carries maximum penalties of three years in prison, a $250,000 fine and restitution.

Last updated: 8:44 pm Thursday, December 13, 2012

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