O.C. Man Guilty of Filing False Tax Refund Claims

A Laguna Niguel man, convicted nearly three years ago of defrauding investors of $1.8 million, has admitted in an unrelated case that he collected nearly $300,000 from the government by filing false claims for tax refunds.

Randall Craig Hutchens, 43, used the names and Social Security numbers of nine adults to fabricate W-2 forms and file fraudulent refund claims for the 1995 tax year, according to Assistant U.S. Atty. Gregory Weingart.

Hutchens apparently was involved in filing the false claims even as he was ending a two-year prison term at a halfway house early last year, Weingart said.

The Internal Revenue Service has been plagued in recent years by fraudulent refund claims, Weingart said. Federal prosecutors in Los Angeles are investigating a number of similar cases, he said.

“It’s a problem that the IRS is cracking down on,” he said. “The amount is fairly large in this case. Other cases involve much smaller amounts and are less sophisticated. The W-2s in this case looked very real. In the other cases, they were more obviously phony.”

Hutchens, who pleaded guilty to charges of making false statements to the U.S., received $296,801. He spent the proceeds on gold coins, a computer and sports trading cards, including rookie cards of basketball stars Magic Johnson, John Stockton and Hakeem Olajuwon. Weingart said Hutchens has agreed to turn over the property to the government as restitution.

He said Hutchens received three checks before IRS agents tracked the activity and intercepted the remaining checks. Each refund ranged from $93,519 to $99,425, according to the plea agreement.

Hutchens, who entered his pleas Tuesday, faces up to 15 years in prison and a $750,000 fine at his sentencing, which is scheduled for June 9 before U.S. District Judge Ronald S.W. Lew in Los Angeles. Neither he nor his lawyer could be reached for comment.

In 1994, Hutchens had pleaded guilty to four counts of securities fraud for bilking 61 investors of $1.8 million. He sold securities through his company, Laguna Equities Inc., that were supposedly issued by two insurance companies and backed by U.S. Treasury notes. Those securities never existed, however.

The investors came mainly from Church of Christ congregations. Part of the yield on the 9.3% interest rate on the notes was supposed to go to church-related activities.

Hutchens also settled a civil lawsuit filed by the Securities and Exchange Commission and agreed to repay investors. The SEC seized his assets at the time to make partial refunds.