A Prior Lake couple has pleaded guilty to charges of stealing $1.8 million in a wide-ranging fraud scheme that involved them filing false tax returns in the names of hundreds of people – many of them immigrants.
U.S. Attorney Andrew Luger announced Tuesday that Mark Hammerschmidt, 48, and his wife Ornella Hammerschmidt, 36, pleaded guilty Monday to conspiracy and tax fraud charges in federal court in Minneapolis.
The Hammerschmidts owned a tax preparation and immigration services business, American Group, that operated in Shakopee and Florida. Between 2010 and 2013, they used the business to prepare and file more than 1,000 false income tax returns on behalf of their tax and immigration clients.
According to the U.S. attorney, the two obtained the personal identification information of immigrant clients, including Guatemalan citizens; used the information to get taxpayer identification numbers for those individuals; then filed multiple years’ worth of false tax returns in those individuals’ names, seeking refunds based on false household income, false dependents and false education credits.
The tax refunds were deposited into bank accounts controlled by the Hammerschmidts, who then kept a portion of the money and paid the rest to their clients.
The Hammerschmidts also filed false Minnesota state income tax returns using the same scheme, according to the U.S. attorney.
The Star Tribune reports that Mark Hammerschmidt faces up to nine years in prison, and his wife Ornella faces up to 21 months in prison. They have agreed to pay restitution of more than $1.8 million to the victims.
The paper notes they could still be charged in Florida or other jurisdictions in connection with the scheme.