Richard Paul Belles, of Mesa, pleaded guilty to tax fraud; specifically one count of Fraud and False Statements, a violation of Title 26, United States Code, section 7206(1) on Monday.
In April 2009, Belles, submitted a 2008 U.S. Individual Income Tax Return, Form 1040 filed the return with the Internal Revenue Service Center, and falsely reported that the federal government had already withheld $513,000 U.S. in federal income tax. The tax fraud resulted in a requested refund of $363,831.
He obtained the $513,000 amount from a Form 1099-OID that was also submitted. He filled out the form falsely claiming to have earned income on an investment that in reality was a mortgage that he owed. He admitted to falsely reporting on the Form 1099-OID that the government had withheld federal tax from income generated by the investment.
On April 24, 2009, after submitting the 2008 return, he received a $363,831 tax refund as a direct deposit into his checking account. He admitted that he knew he was not entitled to the refund.
Of the refund, he spent $149,649.73 before the remaining amount was seized by the IRS in April 2009. When filing the original return, he electronically signed the IRS form subject to the penalties of perjury, and knew that it was unlawful to request a refund that he was not entitled to.