Texas Couple Indicted for $42 Million Tax Fraud Scheme

Larry and Rebecca Kalmowitz face multiple charges for allegedly filing false tax returns and defrauding the U.S. government of over $23M.Photo byRoland DenesonUnsplash

A federal grand jury in Tyler returned an indictment Wednesday charging a Texas husband and wife with crimes related to a conspiracy to defraud the United States by seeking fraudulent tax refunds, the Department of Justice (DOJ) announced Thursday.

According to the DOJ, from 2017 to 2023, Larry and Rebecca Kalmowitz filed false tax returns in the names of estates and trusts, attempting to claim $42 million in fraudulent refunds. The couple allegedly received over $23 million from the IRS through this scheme.

The indictment claims that the Kalmowitzes falsely reported interest income and large income tax withholdings to secure the refunds. They then allegedly deposited the fraudulent tax refund checks into bank accounts set up in the names of the estates and trusts.

The couple is accused of using the proceeds to purchase real estate under a nominee's name and luxury vehicles, including a Ford Mustang Shelby GT500 and a Mercedes-Benz GLS450.

When the IRS sought to recover the fraudulent funds, the Kalmowitzes allegedly obstructed the process by filing false forms to validate the claimed income and withholdings, and submitting a false form to release a federal lien, according to the DOJ.

The couple has been charged with mail fraud, money laundering, conspiracy to defraud the United States, and filing false claims against the U.S.

If convicted, each could face up to 20 years in prison for each count of mail fraud, up to 10 years for each count of money laundering, and a maximum of five years for the conspiracy and false claim charges.

Notably, an indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.