HOLLYWOOD HILLS—The operator of a Glendale tax preparation business was sentenced to 46 months in prison on Monday, June 12, for stealing more than $1.2 million from his clients in tax refunds, according to authorities.
Michael Joseph Calalang Cabuhat, a Hollywood Hills resident, was arrested in April 2016 by special agents of the Internal Revenue Service (IRS) Criminal Investigation and the United States Treasury Inspector General for Tax Administration. He was charged with wire fraud, aggravated identity theft, and structuring financial transactions to evade reporting requirements, according to the U.S. Attorney’s Office. In June 2016, he pleaded guilty to wire fraud and filing of a false federal income tax return.
Cabuhat was also charged with depositing $29,700 in separate transactions over seven days to evade the federal bank reporting requirements. The day after the transactions were completed, he allegedly wrote a $24,500 check for a Ferrari 360 Spider. The vehicle was seized in 2016 when he was arrested.
Cabuhat, 41, is half-owner of VisionQwest Resource GroupInc., which operates VisionQwest Accountancy Group and Icon Tax Group Inc. in Glendale. From 2010 to 2015, he defrauded 144 clients of at least $1.2 million. He reportedly did so by giving clients a copy of their tax return reflecting a smaller refund than he filed with the IRS on their behalf. He would then have the IRS deposit the smaller amount into the client’s account, while placing the remaining amount into his own account.
Cabuhat also falsely informed his clients that they owed taxes, while filing tax returns with the IRS seeking refunds. He would tell clients to make the tax payments to him so that he could direct them to the IRS. He allegedly kept the payments and deposited the clients’ refunds into his own bank account.
“Corrupt tax return preparers harm their clients, other taxpayers, and the United States government,” said United States Attorney Eileen M. Decker in a statement in April 2016. “Mr. Cabuhat’s clients entrusted him with an important duty that we all have at this time of year, and he abused that fundamental trust.”
Cabuhat, who refers to himself as “celebritytaxguy” online, was ordered on June 12 to pay nearly $1.5 million restitution to his clients and to the IRS. He is also expected to pay $426,528 to authorities, from the sale of his home and the Ferrari 360 Spider that was seized.