* Nicole Bermudez Georgia woman sentenced in federal court in San Jose to 12 years for $20 million tax fraud

Published by on December 8, 2010

A Georgia woman accused of trying to engineer a $20 million tax fraud has been sentenced in federal court in San Jose to 12 years and seven months in prison and ordered to pay $2.5 million in restitution.Nicole Bermudez, 40, who acted as her own lawyer, was convicted by a jury in September of conspiracy, five counts of wire fraud, and six counts of financial transactions with illegally obtained funds.She was sentenced by U.S. District Judge James Ware on Monday.Prosecutors alleged at the trial that Bermudez sought to aid more than 40 clients nationwide in seeking $20 million in fraudulent tax refunds from the Internal Revenue Service in a scam known as the original-issue discount scheme.Federal lawyers said only one of the clients, Seth Sundberg, 35, of San Mateo, actually obtained a fraudulent refund, in the amount of $5.1 million for the 2008 tax year. They said he gave Bermudez an $800,000 commission.The 12 counts on which Bermudez was convicted all related to Sundberg’s fraudulent refund.Sundberg, who was prosecuted separately, pleaded guilty to three charges and was sentenced by U.S. District Judge Jeremy Fogel in July to five years and 11 months in prison.The IRS has now seized $2.6 million of Sundberg’s refund, prosecutors said in court papers.Both Bermudez and Sundberg have been ordered to pay restitution of the missing $2.5 million of the refund.”Tax fraud schemes rob the United States of needed funds,” U.S. Attorney Melinda Haag said. She added that her office will “vigorously prosecute and seek significant sentences” for perpetrators.Original-issue discount, or OID, 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.Prosecutors said Bermudez helped her clients falsely claim credit for fictitious tax prepayments in connection with the accounting method. “Unfortunately, the OID scheme is a significant problem,” federal lawyers wrote in a sentencing brief.They said Sundberg’s illegal refund was the largest tax refund ever given to an individual under the OID program and amounted to about 7 percent of a total of $73 million in fraudulent OID refunds given in 2008 Prosecutors wrote that Bermudez has refused to assist them in recovering her $800,000 commission and alleged that she is apparently “attempting to keep a significant portion of the funds concealed until she is released from custody.”

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.


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