Arizona Man Sentenced to 49 Months in Prison for $4.4 Million Conspiracy to Defraud IRS

NEWARK, N.J. – An Arizona man was sentenced today to 49 months in prison for conspiring to obtain over $4.4 million by defrauding the IRS, U.S. Attorney Philip R. Sellinger announced.

Walid Khater, 38, of Mesa, Arizona, previously pleaded guilty before U.S. District Judge Brian R. Martinotti to an information charging him with one count of conspiracy to commit wire fraud and one count of conspiracy to defraud the IRS. Walid Khater’s conspirator, Omar Khater, 33, of Fairfield, New Jersey, previously pleaded guilty to the same charges and was sentenced on June 12, 2024, to 57 months in prison.

According to documents filed in this case and statements made in court:

Walid and Omar Khater were relatives who worked together and with others to steal victims’ identities, which they used to file false tax returns and fraudulently receive tax refunds from the IRS. They electronically submitted tax documents to the IRS falsely claiming that the individual taxpayers listed on those documents had earned certain income or won thousands – and in some cases millions – of dollars in gambling and lottery winnings. The false filings also claimed tax withholdings on the purported income or gambling winnings that entitled the tax filer to refund payments from the IRS.

The Khaters and others typically submitted these fraudulent tax filings using the names and personal identifying information of individual taxpayers without their knowledge or permission. The fraudulent filings caused the IRS to pay lucrative tax refunds, totaling $4.49 million, which the Khaters and others directed to various bank accounts that they controlled.

In addition to the prison term, Judge Martinotti sentenced Walid Khater to three years of supervised release and ordered restitution of $4.49 million.

U.S. Attorney Sellinger credited special agents of IRS-Criminal Investigation, Newark Field Office, under the direction of Acting Special Agent in Charge Jenifer L. Piovesan, and special agents of FBI-Newark, under the direction of Acting Special Agent in Charge Nelson I. Delgado with the investigation leading to the sentencing. He also thanked the NJ Transit Police.

The government is represented by Assistant U.S. Attorneys Fatime Meka Cano of the Economic Crimes Unit and Katherine M. Romano of the Health Care Fraud Unit in Newark.