University Of South Dakota Athletes Ran Tax-Fraud Scheme, Made $400,000
Thursday, January 15th, 2015 @ 3:59PM
By Regina Garcia Cano
SIOUX FALLS, S.D. (AP) — He wore a hoodie and a stocking cap as he made multiple trips to an ATM on a warm day in April 2012, cutting a suspicious enough figure that a concerned citizen tipped off police in the college town. Using surveillance video, they discovered a cornerback for the University of South Dakota’s football team was using a preloaded debit card that had been issued for a tax refund.
The card, however, did not belong to Alphonso "Rico" Valdez. A scheme to defraud the IRS of $1.1 million began to unravel. After a months-long investigation, authorities busted up the fraud ring, which netted about $400,000 over nearly a year.
Six people involved in the complicated scheme were USD football players at the time, and another had once been on the track and field team and impeached as USD’s student government president over allegations of misused funds. But for the hundreds of thousands of dollars the group collected, the school’s athletic officials were never suspicious of any extracurricular activity.
All 11 involved have pleaded guilty to federal fraud charges in Sioux Falls. Valdez, the 23-year-old ringleader, and a co-conspirator are to be sentenced Monday. Those already sentenced received prison times ranging from 2 years to more than 5 years and all but three were ordered to pay $422,000 in joint restitution.