Third Texas tax preparer pleads guilty in multimillion‑dollar refund‑fraud scheme, prosecutors say

AUSTIN – A third Texas tax preparer has pleaded guilty in a sweeping refund‑fraud scheme that ran for nearly four years, admitting he conspired with employees to file federal returns with fabricated business expenses that caused millions in losses to the government, prosecutors said.

Mathews Chacko pleaded guilty to conspiring with employees to defraud the United States by filing false federal tax returns for clients between January 2019 and October 2022, according to the Justice Department.

Prosecutors said Chacko and his co‑conspirators inserted false business expenses on client returns to reduce tax liability and generate improper refunds.

"These false expenses artificially reduced the taxes that Chacko's clients owed to the IRS, which enabled them to receive refunds to which they were not entitled," the agency said in a news release on Tuesday.

Clients sometimes unaware

At times, clients did not know that false items were added to their returns. In other instances, conspirators told clients by email that they were submitting false information to the IRS, prosecutors said.

The tax loss attributed to Chacko was more than $3.5 million but less than $9.5 million, prosecutors said.

Two co‑conspirators previously pleaded guilty. 

Anish Pillai admitted causing $1.5 million to $3.5 million in losses, while Mou Kundu admitted causing $250,000 to $550,000 in losses.

Sentencing still ahead

All three are set to be sentenced at a later date.

Chacko faces up to five years in prison for conspiracy to defraud the IRS. Pillai and Kundu each face up to three years for preparing false returns.

CBS News Texas will provide updates when more information becomes available.