A San Mateo man has been sentenced in federal court in San Jose to five years and 11 months in prison for obtaining a fraudulent $5 million tax refund from the U.S. Internal Revenue Service. Seth Sundberg, 35, who acted as his own lawyer, was sentenced Thursday by U.S. District Judge Jeremy Fogel. He pleaded guilty before Fogel in January to one count of mail fraud, one count of filing a false tax return for 2008, and one count of making a false claim against the government. Fogel also ordered Sundberg to pay $2,488,613 in restitution and a $100,000 fine. Prosecutors said in court filings that the restitution is the amount that authorities have not yet recovered from the fraudulent refund of $5,083,609 sent to Sundberg by the IRS last year. U.S. Attorney Joseph Russoniello said Sundberg obtained the refund by falsely claiming he had paid $5.7 million in taxes as a result of being credited with a type of interest known as original-issue discount income. Original-issue discount income is a method of accounting for the accrual in value of bonds that are bought at below face value and later redeemed at face value. Sundberg was indicted on the three counts and arrested on Sept. 23, 2009, and has been in custody since then. At the time of his arrest, he was the branch manager of Access Mortgage and Financial in San Mateo, a company he helped found, according to a federal criminal complaint. He also operated a company called Sound Mountain Investments in San Carlos, the complaint said. Sundberg was investigated by a special unit of the IRS known as the Frivolous Return Program. “Let this be a warning to individuals who may be considering a similar crime,” Russoniello said in a statement. “You will be caught and prosecuted to the fullest extent of the law.”
Copyright © 2010 by Bay City News, Inc. — Republication, Rebroadcast or any other Reuse without the express written consent of Bay City News, Inc. is prohibited.