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10-year sentence for fraudster who submitted phony tax returns for athletes

At least one of the athletes, who are not alleged to have done anything wrong, played for the Washington Commanders

The U.S. Courthouse in Alexandria, Va. (Cliff Owen/AP)

A California man who admitted he stole millions of dollars in government coronavirus relief funds and submitted phony tax returns on behalf of professional athletes — including at least one who played for the Washington Commanders football team, according to people familiar with the matter — was sentenced Wednesday to 10 years in prison.

Quin Ngoc Rudin, 55, was the “mastermind” behind a complex scheme to prepare fraudulent tax returns for at least nine professional athletes, claiming oversized refunds that led to government losses of more than $19 million, prosecutors said.

Court documents did not name the athletes, but two people familiar with the matter, speaking on the condition of anonymity because they were not authorized to comment on the case, said at least one was a player for the Washington Commanders. Prosecutors did not allege the athletes did anything wrong.

Where did the covid aid money go?

Operating a company called Mana Tax Services, Rudin and his co-conspirators also submitted false applications for covid relief funds to the Paycheck Protection Program on behalf of various entities, causing losses of more than $43 million to the government, according to the Justice Department.

Trim, bald and bespectacled, Rudin would pose as a highflying accounting wizard — and charged a 30 percent fee on the proceeds he obtained for clients, according to court documents. One of his co-conspirators, Seir Robinson Havana, who pleaded guilty in July to being the face of the operation, is a jet pilot who used his cut of the money to buy a classic Mercedes, a BMW and a Rolex watch, according to the documents.

Rudin wanted to “feel successful by attending expensive dinners and flying on private jets,” his public defenders wrote in a sentencing brief. But they said he lived a “humble lifestyle” and mostly spent money taking care of a brother with Down syndrome, who died in April, and also funded coronavirus vaccine clinics in low-income areas near Las Vegas.

Prosecutors said Rudin’s machinations began “almost immediately” after he was released from federal custody for a previous fraud conviction, while he was still on probation.

In 2014, Rudin pleaded guilty in federal court in California to submitting false documents to Cisco Systems to obtain telecommunications equipment and millions of dollars in financing, all on behalf of a company that had not requested it. The scheme cost victims nearly $38 million, and Rudin had paid only a fraction of the restitution he owed as of July, court records show.

“He obviously has the capacity to be a successful businessman, but he channels that capacity towards fraud,” David Zisserson, assistant chief of the Justice Department’s tax division, said at Rudin’s sentencing Wednesday.

Prosecutors had requested that Rudin be sentenced to 11 years and three months in prison, the maximum allowed under his plea agreement. Rudin’s public defenders asked for a term of seven-and-a-half years. U.S. District Judge Anthony J. Trenga imposed a 10-year sentence.

Rudin told the court he was “embarrassed” that his “pride, ego and obsession with regaining some sense of respectability” had once again landed him in prison. “I have more to offer in this life,” he said.

Court documents do not name the athletes for whom Rudin and his accomplices prepared tax filings, but prosecutors have said Rudin flew to Loudoun County, where the Washington Commanders have a training facility, to meet with a player referenced in case records as “Professional Athlete-7.” The people familiar with the matter said the team referenced in the court documents was the Commanders.

“One of the ways he and his co-conspirators effectuated the tax fraud scheme was to claim materially false and fabricated business and personal losses on the athletes’ income tax returns,” according to a statement of facts filed with Rudin’s guilty plea in May. “Additionally, for at least two of the professional athletes, the tax returns claimed exorbitant moving expenses and fabricated farm losses.”

During their meeting in 2019, Havana and Rudin asked Professional Athlete-7 to refer other athletes to them for tax services. The player spoke to other professional athletes “at their practice facility” in Virginia, on the phone and over text messages, court documents say.

Ultimately, several athletes signed up with Rudin, who charged them 30 percent of the income tax refunds he obtained. Professional Athlete-7 “did not have to pay a fee … because he referred other athletes to Mana Tax for similar services,” Rudin’s plea documents say.

Commanders officials declined to comment on the criminal case, but a Commanders spokesperson noted that Rudin was not among recommended resources that are provided to players from both the NFL and NFLPA.

After the coronavirus pandemic hit, Rudin and those working with him successfully submitted nearly 80 fraudulent PPP loan applications on behalf of 14 entities, some of which they controlled, and some of which were controlled by clients.

‘Immense fraud’ creates challenge for officials as they try to tighten scrutiny of $6 trillion in emergency coronavirus spending

“In this case the sole victim is the U.S. government, which knew that the lack of guardrails it imposed on PPP loans would result in fraud,” Rudin’s public defenders wrote in a sentencing brief Sept. 28.

Prosecutors said in their sentencing brief that, “Rudin has been successful at concealing the proceeds of this scheme: the government was unable to trace most of it.”

But U.S. officials said they have recovered more than $15 million of the fraud proceeds. Three other men have pleaded guilty in the scheme: Havana; Milton Estrada; and Rudin’s brother, Thanh Rudin. They are scheduled to be sentenced in the coming months.

Nicki Jhabvala contributed to this report.

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