Santa Ana tax business owner admits pocketing $700,000 in returns

The owner of a Santa Ana tax prep business accused of falsely claiming and pocketing about $700,000 worth of returns admitted to lying to her clients and defrauding the Internal Revenue Service, according to court documents filed Wednesday, Aug. 14.

Karla Montano, 31, is expected to plead guilty to five felony counts of aiding and assisting in the preparation of false tax returns after entering a plea agreement with prosecutors. Montano, the owner and operator of Trebols Income Tax, knowingly filed paperwork seeking fraudulently inflated refunds from the IRS, then transferred the ill-gotten money to her own accounts, court documents said.

Montano admitted to creating two sets of returns in order to conceal her activities from clients on five separate occasions between April 2015 and May 2017, according to the plea agreement. The versions that were shown to her victims were never filed. The documents that were actually submitted to the IRS claimed credits and deductions she knew her clients did not qualify for. The difference between what taxpayers expected and the amount deposited into their accounts was secretly withdrawn by the defendant.

She has agreed to enter the guilty plea during a court appearance scheduled for Monday, Aug. 19. She faces a maximum penalty of 15 years in prison followed by one year on supervised release, but federal officials will recommend a reduced sentence, according to the terms of her deal with prosecutors. She must also pay more than $430,000 in restitution and will be barred from performing tax-related services.

Montano’s attorney did not respond to a request for comment. A representative for Trebols Income Tax could not be reached by Wednesday afternoon.