On November 13, 2017, in the Eastern District of California, former Internal Revenue Service (IRS) employees Della Ornelas and Randall Ruff were each sentenced for aiding and assisting in the preparation of fraudulent income tax returns and for making fraudulent tax returns while an employee of the United States.1 Ornelas and Ruff were initially charged with the offenses in a 38-count indictment in April 2016,2 and were subsequently arrested by agents of the Treasury Inspector General for Tax Administration.3 They each pled guilty in August 2017.4
According to the court documents, at all times relevant to the charges, Ornelas and Ruff were both IRS employees working in Fresno, California. Ruff had been employed by the IRS for approximately 31 years, and Ornelas for approximately 25 years. The two have been married since 2012 and lived together for approximately 20 years prior to that time.5
Between 2005 and 2013,6 Ornelas and Ruff prepared and filed, or caused to be filed, numerous fraudulent Federal income tax returns for themselves, their family members, their friends, and others.7 Specifically, Ornelas willfully aided in the preparation and presentation of 20 Forms 1040, U.S. Individual Income Tax Return, all of which contained fraudulent information resulting in higher tax refunds for the taxpayers. Additionally, Ruff willfully aided in the preparation and filing of 14 Forms 1040, all containing similar types of fraudulent information.8
In addition to the charges related to the fraudulent returns of others, Ornelas, as an employee of the IRS, and in connection with a U.S. revenue law, knowingly made and signed her own Federal income tax return for Tax Year 2009, making false claims. Ruff made the same false claims on three of his own tax returns for Tax Years 2009, 2010, and 2011.9
As a result of their fraudulent conduct, Ornelas and Ruff caused a total tax loss to the IRS of $130,124.10
Ornelas and Ruff were each sentenced to six months in prison, followed by three years of supervised release, six months of which will be monitored with location monitoring technology. Ornelas was ordered to pay restitution to the IRS in the amount of $76,897. Ruff was ordered to pay $53,227 in restitution.11
1 E.D. Cal. Judgment filed Nov. 16, 2017; E.D. Cal. Judgment filed Nov. 16, 2017.
2 E.D. Cal. Indict. filed Apr. 14, 2016.
3 E.D. Cal. Executed Arrest Warrant filed Apr. 15, 2016; E.D. Cal. Executed Arrest Warrant filed Apr. 15, 2016.
4 E.D. Cal. Crim. Docket as of Dec. 8, 2017.
5 E.D. Cal. Indict. filed Apr. 14, 2016.
6 E.D. Cal. Plea Agr. filed July 26, 2017; E.D. Cal. Plea Agr. filed Aug. 25, 2017.
7 E.D. Cal. Indict. filed Apr. 14, 2016.
8 Id.
9 Id.
10 E.D. Cal. Plea Agr. filed July 26, 2017; E.D. Cal. Plea Agr. filed Aug. 25, 2017.
11 E.D. Cal. Judgment filed Nov. 16, 2017; E.D. Cal. Judgment filed Nov. 16, 2017.