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Published on September 04, 2024
San Diego Gang Members Indicted for Embezzling $1.7 Million in COVID Relief Tax Fraud SchemeSource: Google Street View

San Diego streets have become the stage for a different brand of cruelty, as 17 individuals linked to four separate gangs were indicted for conducting a tax fraud scheme, embezzling over $1.7 million in COVID relief funds. The San Diego County District Attorney's Office unveiled the operation, exploiting the pandemic's financial relief measures and claiming that illicit gains far exceeded the $2.2 million initially filed for.

In a bold move to quickly fund their operations, Stephen Pittman, Jr., 31, emerged as the orchestrator of this fraud, recruiting members across gang lines to submit fraudulent tax returns. According to the San Diego County District Attorney's Office, between April and October 2022, these individuals manipulated Form 7202 to claim Credits for Sick Leave falsely and Family Leave for Certain Self-Employed Individuals. Defendants entered up to 15,678 days, exponentially higher than the 60 days allowed, resulting in refunds of up to $229,153.

Pittman used part of the stolen riches to acquire ostentatious symbols of his ill-gotten wealth, such as diamond-encrusted watches and chains. The hefty haul didn't go unnoticed, as law enforcement encapsulated the group with 81 felony counts ranging from conspiracy and tax fraud to money laundering. As of Tuesday, 14 defendants had been arrested; two were already in custody, and one remains at large.

While these crimes may have initially appeared to be separate from violent street activities, it was the detective work during a homicide investigation that led to the unraveling of the financial plot. An IRS refund notice discovered on a suspect's phone linked the cases, indicating a more profound connection between financial crimes and gang violence. San Diego Police Department’s Financial Crimes Division spearheaded the investigation with the East County Gangs Task Force, working to restore justice to a community betrayed.

SDPD Chief Scott Wahl, in a San Diego County District Attorney's Office news release, asserted the diligence of the investigators: "This case is a testament to the thoroughness of our investigators, whose diligence not only helped solve a homicide but helped uncover a significant criminal scheme involving a network of street gangs." The funds, he noted, were meant "for the community most deeply touched by the pandemic, and that’s fraud our department won’t stand for."