Tax Board Auditor Pleads Guilty to Fraud
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An auditor for the state Board of Equalization pleaded guilty in federal court Thursday to defrauding his own agency by submitting false tax refund claims.
Jerald Cowan, 29, of Glendora was an auditor with the board’s fuel taxes division, a job that involved conducting civil and criminal audits of companies suspected of evading motor fuel excise taxes.
Federal prosecutors said Cowan created a sham company called JG Construction and bogus receipts for the purchase of diesel fuel.
In California, fuel taxes are refundable if the buyer can show that the fuel was consumed in off-road operations.
That was what Cowan stated in JG Construction’s tax refund claims to the Board of Equalization. Until the scam was uncovered, he received more than $24,500 in refunds.
Assistant U.S. Atty. Stephen G. Larson said Cowan has made restitution to the Board of Equalization. He faces up to 15 years in prison when he is sentenced in January.
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