On Tuesday, 65-year-old Jose Luis Arenas pleaded guilty to five counts of aiding and assisting in the preparation of false federal individual income tax returns.

A release from U.S. District Attorney for Alaska Bryan Schroder's office said Arenas' clients were mostly the Spanish-speaking community of Anchorage.

Arenas had tax preparation training through H&R Block, but hadn't registered as a tax preparer in Anchorage since 2012. According to the release, he also didn't indicate he filed returns as a paid, professional preparer from 2013 through 2016. The returns instead appeared to be filed individually by the taxpayers.

Arenas would also inflate certain deductions, like charitable giving, to collect larger refunds. According to the release, Arenas would occasionally fabricate medical expenses without his clients' knowledge.

"Shady tax return preparers like this defendant not only steal tax money out of the pockets of all honest citizens, he uses his clients to file false returns, putting them at risk as well,” Schroder said in the release. “We will work closely with our partners at the Internal Revenue Service-Criminal Investigation to protect the honest tax payers in Alaska.” 

Arenas was charging his clients between $100 and $600 per return. The release said he defrauded the government of about $443,465.

“Tuesday’s guilty plea of Jose Arenas for preparing false tax returns for his Anchorage clients highlights a common trend among unscrupulous return preparers. They exploit their client’s lack of knowledge or understanding of tax matters for personal gain,” said Internal Revenue Service-Criminal Investigation Special Agent in Charge Justin Campbell in the release. “Furthermore, he thought that by concealing his paid preparer status he would be shielded from criminal prosecution. He was wrong and he will be held accountable for his actions.”

Arenas is looking at a maximum of three years in federal prison, a fine of up to $250,000, three years of supervised release, five years of probation and restitution.

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