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FOUNTAIN VALLEY, Calif.--(BUSINESS WIRE)--March 29, 1999--A Fountain Valley man has been convicted of filing false tax returns that failed to report hundreds of thousands in income he received for treating victims of automobile accidents, United States Attorney Alejandro Mayorkas Monday announced.
Loc Bao Nguyen, 35, was found guilty late Friday of two counts of filing false tax returns for the years 1991 and 1992.
The evidence presented at trial by Assistant United States Attorney Alka Sagar showed that Nguyen received more than $388,000 in checks from personal injury attorneys who paid Nguyen for medical services he provided to their clients. Nguyen cashed those checks and failed to report the income on his tax returns in 1991 and 1992, Sagar said.
During the trial, Nguyen's ex-wife testified that Nguyen instructed her to cash checks from attorneys at the banks where the checks were issued in order to avoid detection. Nguyen told his then-wife that attorneys did not issue Form 1099s, therefore the checks would not have to be reported. She also testified that some of the cash from the cashed checks was used to pay kickbacks to administrators for various lawyers. Nguyen, who worked as a chiropractor but is presently unlicensed, testified that he could not remember what he had told his accountant about his income.
Nguyen only reported payments from insurance companies on his tax returns. He failed to report more than $650,000 in income in 1991 and 1992.
This case is one of many investigations conducted by the Criminal Investigation Division of the Internal Revenue Service into income tax violations by attorneys and medical providers in connection with the filing of personal injury claims. To date, more than 50 individuals have been convicted of income tax violations and related fraud charges.
Nguyen faces a maximum penalty of three years in federal prison for each of the two counts of subscribing to a false income tax return. The defendant is scheduled to be sentenced on June 7 by United States District Judge William J. Rea.
Assistant United States Attorney Alka Sagar
213/894-6223
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