Third Texas Tax Preparer Pleads Guilty in Multimillion-Dollar Refund Fraud Scheme

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A third Texas tax preparer, Mathews Chacko, has pleaded guilty to conspiring with employees to defraud the United States by filing false federal tax returns for clients between January 2019 and October 2022. Prosecutors say Chacko and his co-conspirators inserted false business expenses on client returns to reduce tax liability and generate improper refunds, sometimes without the clients' knowledge.

Why it matters

This case is the latest development in a federal investigation into a years-long tax refund fraud scheme in Texas. The plea marks the third tax preparer to admit guilt, highlighting the scale and impact of the alleged fraud on the government and taxpayers.

The details

Chacko pleaded guilty to conspiring to defraud the IRS by filing false federal tax returns with fabricated business expenses. This allowed his clients to receive refunds to which they were not entitled. The tax loss attributed to Chacko was more than $3.5 million but less than $9.5 million. Two of Chacko's co-conspirators, Anish Pillai and Mou Kundu, had previously pleaded guilty to their roles in the scheme, causing losses of $1.5 million to $3.5 million, and $250,000 to $550,000, respectively.

• Chacko conspired with employees to file false returns between January 2019 and October 2022.
• Pillai and Kundu had previously pleaded guilty for their roles in the scheme.

What’s next

All three tax preparers are set to be sentenced at a later date. Chacko faces up to five years in prison for conspiracy to defraud the IRS, while Pillai and Kundu each face up to three years for preparing false returns.