COLUMBIA, S.C. -- Three Mexican citizens were convicted in an upstate fraud scheme lasting four years against the Internal Revenue Service, according to the federal prosecutor's office.

 

Katy Rivera, Jose de Jesus Magana-Escoto and Daniel Chavero-Ramirez, all of Mexico and illegally in the United States, pleaded guilty Tuesday to conspiracy to commit mail fraud and for entering the United States without authorization, the U.S. Attorney's Office announced.

 

Assistant U.S. Attorney David C. Stephens described the three as “runners,” who solicited others to have their returns falsely prepared or assisted in obtaining false documents from which to prepare the returns.

 

Prosecutors said the three operated two tax preparation businesses -- Seguros Internacional in Spartanburg and Poz Servicios Para Hispanos in Boiling Springs -- from 2006 to November 2009, filing more than 10,000 federal income tax returns and claiming more than $22 million in refunds.

 

Prosecutors said approximately $13 million in refunds were paid by the IRS before criminal investigators discovered that most of the returns appeared to be fraudulent.

 

Agents estimated that at least 20 people were involved in operating the scheme in which tax preparers knowingly claimed tax credits or deductions to which filers were not entitled. One such tax credit improperly claimed on a majority of the false returns was for child care expenses. This credit can result in a refund, even if no taxes were ever paid.

 

Prosecutors said the three convicted Tuesday did not share in the total profits from the scheme, and not actually prepare the false returns. Prosecutors said the three worked and were paid only for the specific returns on which they assisted.

 

The three remained in custody Tuesday and will be deported after completing whatever sentence is imposed.