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IRS: Rochester Restaurant Front for Tax Fraud Scheme

Created: 05/14/2014 5:49 PM KAALtv.com
By: Brianna Long

(ABC 6 NEWS) -- We are following developing news of a federal investigation into a Rochester business. As we've reported, two businesses and four homes were raided by federal authorities about a year ago. Now, we're learning specifically what the feds were looking for.     

In a 72 page affidavit, an IRS special agent outlines her investigation into Mercedes Rodriguez, a Rochester woman accused of leading an illegal tax preparing business.

The business is said to have taken place in the basement of Tortilleria Jalisco. The IRS agent claims the Rodriguez, as well as several of her family members were forging documents, preparing taxes for illegal immigrants, and collecting millions of dollars worth of tax refund checks.

"I guess its all allegations at this point. But the feds don't release information like this unless there's something there. Its incredibly devastating to know how many families were possibly hurt by the actions being taken here, it just breaks my heart," said Rochester City Council member Michael Wojcik.

Nearly a year ago, federal authorities executed several search warrants, including one at the restaurant, as well as a former business off 7th street called Susan's Boutique.

According to court documents, those locations were used by Rodriguez and her associates as part of an operation where birth certificates were imported from Mexico in order to create tax ID numbers, something used for people who don't have social security numbers.

"As best as I can tell, we've never had issues with this business," said Wojcik.

The checks were allegedly cashed at businesses in Iowa, Wisconsin, and Minnesota, including a grocery store in Albert Lea.

According to the documents, anybody that agreed to let their address be used as a place for the IRS to send checks to, would get ten percent of the check. All together, the IRS says dozens of people were involved.

At this point nobody has been charged, we will bring you any new developments as we learn them.

Photo: ABC 6 News