IRS-Criminal Investigation (CI) Presents: Tax Case of the Month

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October Tax Case of the Month

Father, daughter sentenced to combined 21 years in prison for running fraudulent tax business

Thein Maung and his daughter Phyo Mi ran an elaborate tax preparation scheme from their Iowa home that involved layers of subterfuge. They victimized hundreds of immigrants and refugees who worked at meat-packing facilities in Iowa by claiming fraudulent tax credits and redirecting their customers’ tax refunds to their own accounts. The scheme came to an end following an investigation by IRS Criminal Investigation (CI). In October, Maung and Mi were sentenced to 12 and nine years in federal prison for fraud and related tax charges.

From 2018 to 2022, Maung and Mi charged customers – many who had limited ability to read, write or speak English – more than $200,000 in cash fees to prepare and file more than 1,600 tax returns. The returns claimed over $3.5 million in fraudulent residential energy credits, and Maung and Mi sometimes directed portions of the fraudulent refunds to their own financial institution accounts. As a result, Maung and Mi obtained nearly $50,000 in fraudulent tax refunds.

Additionally, Maung and Mi, without their customers’ knowledge or approval, submitted materials to Iowa Workforce Development directing their customers’ benefits payments be sent to Maung and Mi’s financial accounts. Maung and Mi obtained nearly $70,000 in fraudulent unemployment insurance benefits payments from Iowa Workforce Development.

Each month, CI leadership selects one criminal case adjudicated during the previous month to serve as the Tax Case of the Month. This month’s case was investigated by CI’s St. Louis Field Office.

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CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.