Essex County Tax Preparer Pleads Guilty to Multimillion-Dollar IRS Fraud Scheme

In a shocking revelation, Omar Khater admits to conspiring in a $4.4 million fraud against the IRS.

In a significant development in Newark federal court on January 23, 2024, Omar Khater, a 33-year-old tax preparer from Fairfield, New Jersey, confessed to his involvement in a devious plot defrauding the IRS of over $4.4 million. This admission was announced by U.S. Attorney Philip R. Sellinger.

Khater's guilty plea encompasses charges of both wire fraud conspiracy and conspiracy to defraud the IRS. The case against his alleged co-conspirator, Walid Khater, 38, of Arizona, is still pending.

U.S. Attorney Sellinger described the scheme as "elaborate," involving the misuse of stolen personal information and counterfeit tax returns, leading to substantial losses for the IRS. He emphasized the commitment of law enforcement to eradicate such illegal activities.

Special Agent Tammy Tomlins of the IRS Criminal Investigation, Newark Field Office, highlighted the criticality of safeguarding personal information, especially with tax filing season imminent. She assured that law enforcement would continue to aggressively pursue identity thieves.

FBI – Newark Special Agent in Charge, James E. Dennehy, expressed concern over the betrayal of trust inherent in this case, noting the significant amount of sensitive information tax preparers handle. He pointed out that Khater's fraudulent actions resulted in him defrauding the IRS, but now facing the consequences.

Court documents and statements reveal that Omar and Walid Khater, along with others, engaged in identity theft to file bogus tax returns and illicitly obtain tax refunds. They manipulated tax documents to claim false incomes or gambling winnings and directed the resulting tax refunds to various bank accounts under their control. This scheme resulted in the U.S. Treasury issuing approximately $4.49 million in refunds, which were then diverted to accounts owned by the Khaters and associates.

The consequences of Khater's actions are severe. The charge of conspiracy to commit wire fraud carries a maximum penalty of 20 years in prison, and the conspiracy to defraud the IRS could lead to up to five years in prison. Additionally, each count could result in a fine of up to $250,000 or twice the gross gain or loss caused by the offense. Khater's sentencing is scheduled for June 12, 2024.

This case, led by the efforts of IRS-Criminal Investigation and FBI-Newark agents, is prosecuted by Assistant U.S. Attorneys Fatime Meka Cano and Katherine M. Romano.

It should be noted that the charges against Walid Khater are currently allegations, and he remains innocent until proven guilty.