IRS Director Defrauds Govt. Out Of $1.3 Million

A longtime district director at the Internal Revenue Service has admitted that he defrauded the U.S. government out of $1.3 million with a scam that used fake deductions to reduce the taxes of unsuspecting Americans.

The 30-year IRS veteran, Jesse Cota, pleaded guilty this week to conspiring to defraud the United States and faces five to 10 years in prison as well as a $250,000 fine. He admitted at a court hearing that he pocketed about $300,000 from the scam.

Cota basically prepared, or had others prepare, false federal income tax returns that included illegal deductions that reduced the amount of taxes owed to the government. He did it while operating a large and popular income tax service company out of Topeka Kansas.

Over the years the company, called Renaissance, recruited people to peddle tax packages claiming to lawfully reduce income taxes by deducting personal expenses as business expenses. Federal prosecutors say Cota used his credentials as an IRS director to lend the fraud scheme legitimacy and unsuspecting clients believed the scam was legitimate.

This former high-ranking IRS employee is the seventh person to plead guilty in the tax scandal of this Topeka company, which authorities claim has defrauded U.S. taxpayers out of a total of $75 million over the years.