Tax Fraud Scheme By University Of South Dakota Athletes Netted $400,000
A group of University of South Dakota athletes were involved in a tax-fraud scheme that took in $400,000.
Alphonso “Rico” Valdez, wearing a hoodie and a stocking cap, was allegedly acting suspicious when a concerned citizen called police in the college town. Valdez was seen making multiple trips to an ATM one day in April 2012. Police used a surveillance video to find that the cornerback for the USD’s football team was using a pre-loaded debit card that had been issued for a tax refund.
Problem was the card didn’t belong to Valdez. It was all part of a plan to defraud the IRS of $1.1 million. The 23-year-old Valdez was the ringleader. “After a months-long investigation, authorities busted up the fraud ring, which netted about $400,000 over nearly a year,” reports The Huffington Post.
Six of the people involved in the scheme were USD football players at the time, and another was a former track and field team member who was impeached as USD’s student government president amid allegations of misused funds.
In total, there were 11 involved. All have pleaded guilty to federal fraud charges in Sioux Falls. Valdez and a co-conspirator were the last to be sentenced. Others have already been sentenced to prison times ranging from two years to more than five years. All but three must pay $422,000 in joint restitution.
It was Valdez who recruited fellow students as well as his girlfriend and others he knew in his hometown of Tampa, Florida. He had them collect names, addresses, Social Security numbers, and other identifying information for the scheme, which went on between June 2011 and May 2012. The group used the data to file fraudulent tax returns.
The scheme was coordinated via text messages, and it was through texts that Valdez ordered some of the others, including then-defensive back Marquis Butler, to make deposits to Valdez’s bank account. According to prosecutors, Butler, 24, allegedly collected $85,500 for the group.
More than 30 Social Security numbers were collected by Valdez’s now ex-girlfriend, Tampa resident Melissa Dinataly, who was employed by an insurance company. “Twelve false returns connected to her were filed in 2011 claiming over $110,000 worth of refunds, and authorities caught all but one of the fakes before the defendants got the money,” reports HuffPo.
This was just the beginning of the group’s plan, say authorities.
“If successful, this thing would have gotten much bigger than it did,” assistant U.S. attorney John Haak told the court during Dinataly’s sentencing hearing in June.