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SANTA ANA (CNS) - A 66-year-old former Orange County tax preparer was sentenced Monday to 10 years in federal prison for a tax fraud scheme that sought more than $10 million from the IRS and state tax agencies across the country.
Stephen Jake McGonigle, of Victorville, was convicted in November of single counts each of conspiracy to defraud the United States, conspiracy to commit wire fraud and aggravated identity theft.
The tax fraud scheme, which started in 2013, included sending one of the co-defendants to Thailand to get phony identification documents using stolen victim identities, prosecutors said. The fake IDs were used to get prepaid debit cards and mail boxes across the county and elsewhere that were not traceable, prosecutors said.
After having the debit cards sent to the mail addresses, McGonigle and his co-conspirators filed bogus tax returns with the stolen identities, prosecutors said.
Prosecutors sought a maximum sentence of 20 years. McGonigle's defense attorney, Joshua Lowther, said the punishment should have been between 70 to 87 months behind bars.
U.S. District Judge James Selna ordered $1.2 million in restitution. He broke down the restitution as follows:
--IRS, $375,018;
--Alabama, $1,924;
--California, $350,411;
--Connecticut, $8,803;
--Maine, $71;
--Maryland, $65,502;
--Massachusetts, $634;
--New Jersey, $89,608;
--New Mexico, $44,018;
--New York, $102,361;
--North Carolina, $88,822;
--Ohio, $6,726;
--Pennsylvania, $91,902; and
--Wisconsin, $855.
When Selna asked the defendant if he wished to say something for himself before sentencing, McGonigle declined.
"There's nothing I'd like to add at this time," he said.
"Well, this is the time," Selna replied, making sure the defendant didn't want to speak on his own behalf.
"I appreciate the opportunity, your honor ... but I'm fine," McGonigle said.
Selna granted a motion from federal prosecutors to have a $300,000 bond McGonigle posted to remain free while awaiting trial forfeited to pay restitution.
Lowther argued that the bond was secured by a home the defendant financed and refurbished with two other owners, so the third-party interests should preclude forfeiture of the money. The three secured a loan just less than $600,000 and, after McGonigle improved the home, it was sold for $1.2 million, Lowther said.
Selna noted that the investors would have gained $400,000 apiece, but Lowther said he wasn't sure what the net profit was.