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Trial date set for Riverside couple accused of filing $325,000 in bogus tax refunds

RIVERSIDE - An Aug. 10 trial date is set for a Riverside husband and wife accused of scamming the Internal Revenue Service out of $325,000 in bogus tax refunds, the IRS announced today.

Abelardo and Dora Argote are accused of assuming the identities of other people to claim tax refunds. The IRS alleges the Argotes falsified W-2 forms, and also instructed tax preparers to fill out fake forms on their behalf, for five years starting in 2002.

If convicted, each faces a maximum of 100 years in federal prison and fines totaling $1,750,000, according to the IRS.

Their trial will be in downtown Los Angeles before U.S. District Court Judge A. Howard Matz.

Riverside - A U.S. Marine captain's wife, accused with her husband of skimming hundreds of thousands of dollars from government contracts tied to troop supplies in Iraq, pleaded guilty today to tax fraud.

A teary-eyed Janet Schmidt, 39, admitted to U.S. District Judge Virginia Phillips that she had ''willfully and knowingly'' signed her name to a false income tax return in March 2009, covering up some $458,000 in taxable earnings.

''Is your decision to plead guilty entirely voluntary?'' Phillips asked.

''Yes, your honor,'' Schmidt replied.

''Do you understand everything that's being alleged here today?'' the judge asked.

''Yes,'' said Schmidt, choking up.

The woman and her husband, Capt. Eric Schmidt, 39, were charged earlier this month with one count each of conspiracy to commit wire fraud and filing a false income tax return for allegedly siphoning away an estimated $1.73 million in funds intended to buy equipment for Marines deployed in support of Operation Iraqi Freedom.

The Schmidts, who reside in Murrieta and remain free on bond, have both entered into plea deals with the U.S. Attorney's Office, according to federal prosecutor Charles Kovats.

He said Eric Schmidt is scheduled to enter his plea on April 2.

Janet Schmidt is slated to be sentenced June 7. She could face three years in federal prison, though the U.S. Attorney's Office is expected to recommend a much lower term for the defendant, who has a child with her husband.

She could have faced a maximum 23 years behind bars if convicted on both counts.

The defendants were arrested following a months-long investigation by the Naval Criminal Investigative Service, the IRS and the Special Inspector General for Iraq Reconstruction.

According to prosecutors, the alleged fraud occurred in 2008 while Eric Schmidt, who is attached to the First Marine Division at Camp Pendleton, was a Marine Corps contracting representative working on the Iraqi First Program, designed to increase the participation of Iraqi companies in federal contracts for the benefit of Iraq's economy.

Schmidt is accused of using his position to steer business to the Al-Methwad Co., with whose executives he apparently had a relationship.

Janet Schmidt located vendors ''to provide the goods purportedly to be furnished by Al-Methwad under the terms of the contract,'' said U.S. Attorney's Office spokesman Thom Mrozek.

He alleged that the woman, using funds provided by Al-Methwad, purchased ''far fewer or inferior products than those required by the contract.''

A deficient shipment would then be sent to Iraq, where her husband signed off on it, certifying everything was in order and that Al-Methwad had met the terms of its Pentagon contract, according to the U.S. Attorney's Office. The company was then paid in full by the U.S. government, prosecutors said.

Marines, meantime, were shortchanged on supplies. According to the criminal complaint, one contract called for a number of exercise machines and dumbbell sets to be delivered to an outfit, but the Schmidts allegedly purchased an insufficient quantity and pocketed $93,000 that should have been spent on the gear.

Federal agents seized the Schmidts' two homes -- the one in Murrieta and another in Big Bear -- and also impounded their Mercedes Benz sedan and BMW M3 Coupe.

As part of her plea agreement, Janet Schmidt forfeited all claims to the property.

She told Phillips that she intends to move back to her home state in the Midwest. Eric Schmidt remains on active duty, according to Kovats.

Janet Schmidt and her attorney, Vicki Podberesky, declined to comment on the case.

Marine captain's wife expected to plead guilty today

Riverside - A U.S. Marine captain's wife accused with her husband

of skimming hundreds of thousands of dollars from government contracts tied to

troop supplies in Iraq is expected to plead guilty today to federal charges.

Janet Schmidt and Capt. Eric Schmidt, both 39, face one count each of

conspiracy to commit wire fraud and filing a false income tax return for

allegedly siphoning away roughly $1.75 million in funds intended to buy

equipment for Marines deployed in support of Operation Iraqi Freedom.

Federal prosecutor Charles Kovats told City News Service Wednesday that

the Schmidts have both entered into plea deals with the U.S. Attorney's Office,

though he would not disclose the nature of the agreements, which remain sealed

early this morning.

The defendants, who reside in Murrieta, were arrested and charged

earlier this month, following a monthslong investigation by the Naval Criminal

Investigative Service, the IRS and the Special Inspector General for Iraq

Reconstruction. They are both free on bond.

According to prosecutors, the alleged fraud occurred in 2008 while Eric

Schmidt, who is attached to the First Marine Division at Camp Pendleton, was a

Marine Corps contracting representative working on the Iraqi First Program,

which is designed to increase the participation of Iraqi companies in federal

contracts for the benefit of Iraq's economy.

Schmidt is accused of using his position to steer business to the Al-

Methwad Co., with whose executives he apparently had a relationship.

Janet Schmidt located vendors ''to provide the goods purportedly to be

furnished by Al-Methwad under the terms of the contract,'' said U.S. Attorney's

Office spokesman Thom Mrozek.

He alleged that the woman, using funds provided by Al-Methwad, purchased

''far fewer or inferior products than those required by the contract.''

A deficient shipment would then be sent to Iraq, where her husband

signed off on it, certifying everything was in order and that Al-Methwad had

met the terms of its Pentagon contract, according to the U.S. Attorney's

Office. The company was then paid in full by the U.S. government, prosecutors

said.

Marines, meantime, were shortchanged on supplies. According to the

criminal complaint, one contract called for a number of exercise machines and

dumbbell sets to be delivered to an outfit, but the Schmidts allegedly

purchased an insufficient quantity and pocketed $93,000 that should have been

spent on the gear.

Federal agents seized the Schmidts' two homes, including one in Big

Bear, and two vehicles were also impounded pending the outcome of the case.

Eric Schmidt is slated to be arraigned April 2, when he is expected to

plead guilty, according to Kovats, who said the maximum sentence each defendant

faces is 23 years in federal prison.

Marine captain's wife expected to plead guilty tomorrow

Riverside - A U.S. Marine captain's wife, accused with her husband

of skimming hundreds of thousands of dollars from government contracts tied

to troop supplies in Iraq, is expected to plead guilty tomorrow to federal

charges, a prosecutor said.

Janet Schmidt and her husband, Capt. Eric Schmidt, both 39, face one

count each of conspiracy to commit wire fraud and filing a false income tax

return for allegedly siphoning away roughly $1.75 million in funds intended to

buy equipment for Marines deployed in support of Operation Iraqi Freedom.

Janet Schmidt made her initial court appearance today before U.S.

Magistrate Oswald Parada and is expected to return to federal court in

Riverside on Thursday morning to plead guilty to one or both of the

government's charges, according to Assistant U.S. Attorney Charles Kovats.

The federal prosecutor told City News Service the Schmidts have both

entered into plea deals with the U.S. Attorney's Office, though he would not

disclose the nature of the agreements, which remain sealed.

The defendants, who reside in Murrieta, were arrested and charged

earlier this month, following a months-long investigation by the Naval Criminal

Investigative Service, the IRS and the Special Inspector General for Iraq

Reconstruction.

They are both free on bond.

According to prosecutors, the alleged fraud occurred in 2008 while Eric

Schmidt, who is attached to the First Marine Division at Camp Pendleton, was a

Marine Corps contracting representative, working on the Iraqi First Program,

which is designed to increase the participation of Iraqi companies in federal

contracts for the benefit of the Middle Eastern country's economy.

Schmidt is accused of using his position to steer business to the Al-

Methwad Co., with whose executives he apparently had a relationship.

Janet Schmidt located vendors ''to provide the goods purportedly to be

furnished by Al-Methwad under the terms of the contract,'' said U.S. Attorney's

Office spokesman Thom Mrozek.

He alleged that the woman, using funds provided by Al-Methwad, purchased

''far fewer or inferior products than those required by the contract.''

A deficient shipment would then be sent to Iraq, where her husband

signed off on it, certifying everything was in order and that Al-Methwad had

met the terms of its Pentagon contract, according to the U.S. Attorney's

Office.

The company was then paid in full by the U.S. government, prosecutors

said.

Meantime, Marines were shortchanged on supplies. According to the

criminal complaint, one contract called for a number of exercise machines and

dumbbell sets to be delivered to an outfit, but the Schmidts allegedly

purchased an insufficient quantity and pocketed $93,000 that should have been

spent on the exercise gear.

Federal agents seized the Schmidts' two homes, including one in Big

Bear, and two vehicles were also impounded by the government pending the

outcome of the defendants' case.

Eric Schmidt is slated to be arraigned April 2, when he is also expected

to plead guilty, according to Kovats, who said the maximum sentence each

defendant faces is 23 years in federal prison.

 

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