A Los Angeles County man was facing federal charges for allegedly running a tax refund scheme in which he sought more than $700 million in fraudulent refunds and caused a tax loss to the Internal Revenue Service of nearly $13 million, the U.S. Department of Justice announced Tuesday.
Melvin Louis Hughes is charged in L.A. federal court with mail fraud and various tax crimes related to the alleged scheme.
As alleged in the indictment unsealed last week, Hughes submitted fraudulent tax forms for himself and others, claiming more than $360 million in unearned refunds based on fictitious federal income tax withholdings.
In 2024 and 2025, as a further part of the scheme, Hughes allegedly filed false returns which claimed more than $370 million in refunds based on false tax withholdings, the DOJ said.
Hughes allegedly received nearly $6.2 million in tax refunds. Prosecutors contend he used the funds to purchase a $1.84 million house in Malibu, two Tesla automobiles, and nearly $500,000 in cryptocurrency.
Hughes also allegedly promoted the scheme to at least 17 other taxpayers, collecting various fees from them in exchange for his assistance. From at least five taxpayers, Hughes allegedly demanded 10% of the refund they received but instructed that the payment be made to Brother to Brother Outreach Trust, another purported trust he created and falsely characterized as a charitable donation, prosecutors said.
Hughes allegedly received nearly $868,704 from the taxpayers who had utilized his scheme, according to the DOJ.
In total, Hughes is alleged to have caused a total tax loss to the IRS of nearly $13 million, the indictment says.
Hughes was charged with mail fraud, making a false claim, filing a false tax return, and assisting in the preparation of false tax returns, the DOJ said.