Arizona Man Sentenced to 49 Months for $4.4 Million IRS Fraud Conspiracy

Arizona man sentenced to 49 months for $4.4 million IRS fraud conspiracy involving identity theft and false tax returns.Photo byTyler RutherfordonUnsplash

An Arizona man has been sentenced to 49 months in prison for his role in a $4.4 million conspiracy to defraud the IRS, the U.S. Attorney’s Office for the District of New Jersey announced today.

Walid Khater, 38, of Mesa, pleaded guilty to conspiracy to commit wire fraud and conspiracy to defraud the IRS.

His co-conspirator, Omar Khater, 33, of Fairfield, New Jersey, was sentenced to 57 months in June 2024 for his participation in the same scheme, the department says.

Court documents and statements revealed that the Khater brothers worked together to steal identities and file false tax returns, fraudulently generating tax refunds from the IRS.

The department says the defendants electronically submitted tax filings falsely claiming that the individuals had earned income or significant gambling and lottery winnings.

These filings also falsely reported tax withholdings, making it appear that the filers were owed substantial refunds, according to the U.S. Attorney’s Office.

The Khaters used the stolen personal information of victims, without their knowledge or consent, leading the IRS to issue refunds totaling $4.49 million.

The fraudulent funds were deposited into various bank accounts controlled by the Khaters and their accomplices, the department stated.

In addition to his prison sentence, U.S. District Judge Brian R. Martinotti ordered Walid Khater to serve three years of supervised release and pay restitution of $4.49 million.

The department stated that the Khaters and their associates enriched themselves at the expense of taxpayers and the federal government.