Three Myrtle Beach family members convicted for roles in $530K pandemic fraud

Three members of a Myrtle Beach family were convicted and sentenced in federal court for their roles in a scheme to defraud the federal government out of more than a half-million dollars, the U.S. Attorney’s Office said Tuesday. 

Donna Karakatsani, 48, received two years in prison, her son, Ivo Krasimirov Ivanov, 29, got a year-and-a-half and Karakatsani’s husband, 54-year-old Todor Milkov Stoenchev, was sentenced to five years of probation due to his “limited role” in the scheme, the U.S. Attorney’s Office said in a news release. 

Karakatsani and Ivanov are accused of targeting foreign individuals – usually Bulgarians – who had spent time in the U.S. by representing themselves as tax preparers and submitting tax returns for them while keeping tax credits to which neither the defendants nor foreign nationals were entitled. 

The news release said the pair would recruit foreign nationals through the internet and around Myrtle Beach before they submitted “numerous tax returns in the names of these foreign individuals, and would often cause those foreign individuals to receive refunds, primarily education credits. However, as foreign workers they were not entitled to these education credits.”

The defendants then recruited other individuals to open bank accounts where they could deposit the money received from the foreign national’s tax returns, the attorney’s office said. The news release said they opened 68 bank accounts at 16 different banks in the names of 14 other individuals. 

As part of the CARES Act, passed in response to the COVID-19 pandemic, the government sent economic impact payments to qualifying individuals with bank accounts on file with the IRS.

Hundreds of those economic impact payments were deposited into bank accounts controlled by the defendants, the attorney’s office said, adding that the defendants kept the money for themselves and spent it on personal expenses and real estate. 

They ultimately defrauded the government out of $530,292.60, the U.S. Attorney’s Office said.

“During a time when many families were struggling to make mortgage payments, this family was buying houses with money they stole from the American people,” said U.S. Attorney Adair F. Boroughs in the news release.

“This fraud scheme was complex, lasted over several years, and took place primarily during a pandemic when these funds were sorely needed,” Boroughs continued. “These defendants deserve their sentences, and I want to thank our federal partners who followed every lead, including interviewing dozens of foreign nationals and poring through mountains of tax returns and foreign-language correspondence. Their quick and thorough investigation also allowed the government to recover a substantial portion of the stolen funds.”

The U.S. Attorney’s Office said the government recovered about $380,000 in stolen funds, primarily through the sale of the “ill-gotten property,” and the defendants were ordered to pay $150,893.58 in restitution.