IRS employee charged with bribery, stealing refund

By Mary Manning

Monday, Nov. 3, 2008 | 1:38 p.m.

An IRS employee in Las Vegas has been charged with accepting a bribe in exchange for preparing a false audit report for a taxpayer and stealing another taxpayer's federal income tax refund and economic stimulus check.

Tax compliance officer Fernando Cruz of Shady Grove, Ore., is charged in a three-count indictment returned on Oct. 22 with a count of a public official accepting a bribe and two counts of wire fraud while he worked in the Las Vegas IRS office, said Greg Brower, U.S. Attorney for Nevada.

While working for the IRS, Cruz received ethics and IRS employee conduct information, Brower said. He was prohibited from preparing tax returns for compensation, gifts or favors, prohibited from using his public office for private gain and was required to report any attempted bribes to the IRS.

The bribery charge alleges that in May 2008, Cruz was assigned to audit the individual joint tax return of a Las Vegas couple. On about June 14, he allegedly accepted $1,000 in cash and assistance in finding an apartment in exchange for performing a favorable audit of the couple's 2006 joint individual tax return.

The fraud charges allege that on March 9 he prepared a 2007 federal individual tax return for a taxpayer. Without the taxpayer's permission, Cruz allegedly placed his own bank account number and bank routing number on the taxpayer's tax return. As a result, the taxpayer's $1,109.29 income tax refund and $728 economic stimulus payment were electronically deposited into Cruz's bank account.

When the taxpayer asked Cruz why he had not received his tax refund, Cruz falsely told the taxpayer that he would contact the IRS, when Cruz knew that he didn't intend to call the agency because both the refund and stimulus payment had been deposited in his own account.

Cruz was arraigned in federal court on Friday and pleaded not guilty to the charges. He has been released on a personal recognizance bond pending trial, currently scheduled to begin on Dec. 22. The indictment contains only charges and is not evidence of guilt.