Ex-Valley Resident Pleads Not Guilty to Tax Fraud

A former Granada Hills man pleaded not guilty Tuesday in federal court to charges he took part in a conspiracy to file bogus income tax returns.

Prosecutors contend Julius Alli, 39, used the names of unsuspecting adults and children, as well as stolen Social Security numbers, to help five others file fraudulent tax returns.

The false tax claims sought roughly $12 million in refunds, said Assistant U.S. Atty. Manuel A. Abascal. He refused to say how much of the total Alli is alleged to have claimed.

Alli allegedly received the names and information from county databases obtained through his wife, who worked for the Los Angeles County Department of Children and Family Services, Abascal said. Alli’s wife has not been charged.

The indictment alleges Alli and five co-conspirators used the information to prepare false tax returns in 1994 for income allegedly earned in 1993, Abascal said. Alli lived in Granada Hills at the time.

Abascal said Alli and the others also rented private post office boxes in Southern California and Phoenix, where they planned to receive refund checks from the IRS.

The IRS sent about $500,000 in refunds to the mailboxes before the alleged fraud was discovered, Abascal said.

The scheme was discovered by IRS agents when they noticed a pattern of returns requesting earned income credits for children as well as “rebates for large-scale gas purchases,” according to Abascal. When the IRS took a closer look at the returns, “they found out a lot of these supposed taxpayers were children,” he said.

Alli’s trial date was set for July 20 in U.S. District Court. If he is found guilty, he could face up to 25 years in jail and be fined up to $1.25 million.

He was arrested May 5 in Phoenix, where he was living. He was released on $25,000 bail.

Of the five named in Alli’s indictment, four pleaded guilty and one is a fugitive, Abascal said.