Seventeen individuals from four different San Diego-area gangs have been indicted by a grand jury on various felony charges for their alleged involvement in fraudulently applying for COVID-related tax credits. This announcement was made by prosecutors on Wednesday.
The alleged scheme revolved around fraudulent tax claims for sick and family leave credits, which were meant to assist self-employed individuals impacted by the COVID-19 pandemic. The defendants purportedly manipulated the tax form used to apply for these credits, surpassing the maximum of 60 days allocated for pandemic-related leave. Prosecutors have revealed that some defendants entered excessively long time periods, ranging from 790 to 15,678 days of leave for a single year.
Stephen Pittman Jr., a 31-year-old individual, allegedly masterminded the scheme and is now facing prosecution. According to the charges, Pittman recruited accomplices and assisted them in submitting fraudulent claims.
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According to a news release published on Wednesday, prosecutors have accused Pittman of using a portion of the funds to buy luxury items, including diamond-encrusted Cartier and Rolex watches, three diamond chains, and a necklace adorned with diamonds that features his gang moniker, “Blu Flame,” with the “B” crossed out.
The San Diego County District Attorney’s Office reveals that the defendants allegedly sought credits for pandemic relief amounting to more than $2.2 million. They reportedly received approximately $1.75 million and purportedly utilized these funds for personal purposes, benefiting both themselves and their gangs. As a result of the fraudulent tax returns, the IRS reportedly made payments ranging from $97,645 to $229,153.
The alleged fraud came to attention when a suspect’s cell phone, which was being examined during an unrelated murder investigation, uncovered potential evidence of a fraudulent tax refund. The DA’s Office has revealed that the investigation into the 2022 Lincoln Park homicide of Tre’Von Stewart-Jordan has led to the conviction of one defendant for murder and a life without parole sentence. Additionally, multiple individuals, including Haben Haile, have been charged with murder and are also implicated in the fraud indictment.
The defendants face a total of 81 felony charges, which include conspiracy to commit a crime, filing a fraudulent tax return, assisting in the filing of a fraudulent tax, receiving stolen property, and money laundering.
San Diego County District Attorney Summer Stephan issued a warning to the public, emphasizing the severity of this fraud. She emphasized that it is not just about the financial loss, but also about the potential consequences of the money falling into the hands of criminals. She stated, “When it’s in the hands of gangsters, they can use it to purchase more guns, more drugs, and facilitate activities such as human trafficking and drug distribution that harm our community.”
According to the DA’s Office, 14 out of the 17 defendants were apprehended on Tuesday. At the time of the arrest, two of the defendants were already in custody, while one is currently still at large.
