Man in U.S. illegally agrees to pay IRS $1 million, leave country after pleading guilty to tax fraud

A man from Mexico who is in the United States illegally has agreed to pay $1 million to the government and leave the country voluntarily after pleading guilty to a complex identity theft fraud, the U.S. attorney's office announced Tuesday.

Dimas Chavez-Pina, 29, of Milwaukee, pleaded guilty to theft of government money and aggravated identity theft earlier this month.

Chavez-Pina agreed to pay $1 million in restitution to the Internal Revenue Service and to be voluntarily deported to Mexico, according to the U.S. attorney's office.

Chavez-Pina was named in a 25-count indictment last April and was scheduled to go to trial earlier this month. He has remained in custody since the indictment after prosecutors successfully argued that he was a flight risk. Documents indicate he was discussing fleeing the country and others involved in the scheme already fled to Mexico.

According to the plea agreement:

The investigation began in 2014 when IRS agents staked out a check cashing store that was cashing fraudulently obtained refund checks. They spotted Chavez-Pina at the store and followed him to a house on Milwaukee's south side.

Agents raided Chavez-Pina's apartment in 2015 and found evidence of the fraud and also found two guns and ammunition. It's unclear if Chavez-Pina was in custody between the search in 2015 and the indictment last year.

At the time of the raid, Chavez-Pina told agents he had been in the U.S. illegally since 2006 and had been arrested several times for domestic violence but never convicted. Online court records show someone sought a domestic violence restraining order in 2016 against Chavez-Pina last year but then did not come to court.

The online records also show Chavez-Pina convicted in two cases of driving without a valid license. He received fines.

On the federal fraud case, agents found that Chavez-Pina fraudulently obtained Individual Tax Identification Numbers (ITIN) from the IRS.

The agency gives such numbers to individuals who cannot, due to their immigration status, obtain a Social Security number but still must file income tax returns. The tax numbers allow them to file returns.

To get an ITIN, an applicant has to give the IRS personal identifying documents. Chavez-Pina admitted to obtaining personal identifying documents from citizens of Mexico, fraudulently applying for ITINs in their names and then filing fraudulent tax returns using the ITINs he obtained.

In the fraudulent tax returns that he filed, Chavez-Pina claimed the Additional Child Tax Credit. The credit reduces tax liability dollar for dollar, and the unused portion of a refundable credit is still payable to the taxpayer. So, when an individual has no income tax liability, a person may still file a tax return and receive a refund for the credit.

Chavez-Pina falsely claimed dependents in the tax returns that he filed to receive the credit.

From 2011 through June 2014, Chavez-Pina received $1,058,827 in government refund checks from his scheme.

Chavez-Pina faces a mandatory minimum of two years in prison and up to 12 years. He will be sentenced by U.S. District Judge Lynn Adelman on May 1.