News Releases


The California Department of Corrections (CDC) today announced it has broken a large inmate conspiracy to defraud the Internal Revenue Service (IRS).

“I want to give credit to our professional staff who uncovered this criminal activity last November, and worked diligently and professionally to identify those responsible,” said CDC Director James H. Gomez. “We are working actively with federal investigators to have the inmates and their crime partners outside the prison charged and prosecuted.”

Twenty five (25) inmates at the California Men’s Colony (CMC) at San Luis Obispo have been identified as suspects. Six are charged with organizing the conspiracy to defraud the government. Nineteen (19) are being charged with filing one or more fraudulent Federal Income Tax returns.

Inmates filed phony income tax returns and with help from friends and relatives outside of the prison cashed refund checks and divided the money. A total of 48 fraudulent tax returns claiming $122,000 in refunds has been traced to the inmates by the IRS. About $44,000 is believed to have been paid by IRS.

The conspiracy was uncovered in November by CMC prison investigators. To avoid jeopardizing a joint investigation with the Internal Revenue Service Criminal Investigations Unit, no action was taken against inmate suspects until this week. This week 25 inmate suspects were rounded up at the prison and confined to cells away from the rest of the prison population.