Two More Defendants Sentenced to Prison for Multimillion Dollar Schemes Involving Preparation of False Tax Returns for Professional Athletes and PPP Loan Fraud

Two California men have been sentenced to prison in a conspiracy to defraud the IRS and the Paycheck Protection Program (PPP), a federal loans initiative designed to help businesses pay their employees and meet expenses during the COVID-19 pandemic. Thanh Ngoc Rudin of Rosemead, 58, was sentenced to 34 months in prison on Feb. 10, 2023, and his coconspirator, Seir Havana of North Hollywood, 46, was sentenced today to 42 months in prison. Thanh Rudin’s brother, Quin Rudin, was sentenced in October 2022 to 10 years in prison for his role in the scheme.

According to court documents and statements made in court, Thanh Rudin was a principal of Mana Tax Services, a tax preparation business in the Los Angeles area. Havana was the company’s Vice President/Director and Chief Executive Officer. Quin Rudin was its Secretary, Director, and Chief Financial Officer. They engaged in two fraud schemes using Mana Tax, while Quin Rudin was still on supervised release for a different fraud scheme in California.

The defendants prepared and filed with the IRS a series of false income tax returns on behalf of at least nine professional athletes. The false tax returns reported fictitious business and personal losses to generate refunds the athletes were not entitled to receive. The defendants also filed amended tax returns for most of the athletes for prior years to correct what they falsely characterized as “errors” made by the athletes’ previous accountants. Mana Tax charged the athlete clients 30% of the fraudulent tax refunds. The tax fraud scheme caused a total tax loss of more than $19 million.

The Rudin brothers and Havana also prepared and submitted false applications for PPP loans on behalf of small businesses, shell companies, and other business entities they controlled, and took a fee of 30% of the fraudulent loan. They submitted fabricated tax returns to support the PPP loan applications, and some of the business owners never saw their loan applications before Mana Tax filed them. The loan applications grossly inflated the number of employees and monthly payroll costs. Some of the businesses had no payroll expenses and were not actually eligible for PPP loans.

During the investigation, the government seized more than $11.8 million of the fraudulent PPP loan proceeds from bank accounts controlled by the defendants. In addition, Havana surrendered cashier’s checks totaling approximately $5.6 million, representing a portion of the fees charged to professional athletes for the preparation of their false tax returns and a portion of the fees taken from the fraudulent PPP loans.

In total, the two schemes caused more than $44 million in losses to the United States.

In addition to their respective terms of imprisonment, Senior U.S. District Judge Anthony J. Trenga ordered the defendants to each serve 3 years of supervised release. Thanh Rudin was ordered to pay $38,206,074.98 and Seir Havana was ordered to pay $38,673,403.24 in restitution to the United States.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division, U.S. Attorney Jessica D. Aber for the Eastern District of Virginia, Special Agent in Charge Wayne A. Jacobs of the FBI Washington Field Office Criminal Division, and Special Agent in Charge Darrell J. Waldon of the Washington, D.C. Field Office, IRS-Criminal Investigation made the announcement.

The U.S. Attorney’s Office for the Central District of California and the U.S. Small Business Administration provided assistance with the investigation.

Assistant Chief David Zisserson of the Tax Division and Assistant U.S. Attorneys Kimberly M. Shartar and Kimberly R. Pedersen are prosecuting the case.