BAKERSFIELD, Calif. (KGET) — Two Bakersfield men have been indicted on federal charges in connection to an alleged $25 million tax fraud scheme involving phony businesses and stolen identities, federal prosecutors said Tuesday.

Miguel Martinez, 39, and Victor Cruz, 38, both of Bakersfield, were charged in an 11-count indictment with conspiracy to defraud the United States and filing false claims to the IRS, according to a release from the U.S. Attorney’s Office of the Eastern District of California. Martinez was also charged with identity theft, officials said.

Prosecutors say Martinez and Cruz filed hundreds of fraudulent federal income tax returns claiming over $25 million in refunds between November 2019 and June 2023.

The two allegedly used stolen identities to create fake businesses, reported phony wages and withholding information to the IRS, and then submitted hundreds of income tax returns based on the fraudulent information claiming more than $25 million in refunds.

Cruz was a tax preparer in Bakersfield and was arrested Monday in Los Angeles after arriving from Mexico, prosecutors said. Martinez was arrested in June and allegedly was in possession of $750,000 in fraudulent checks and over 200 identification cards at the time, according to prosecutors.

Martinez and Cruz face a maximum of 10 years in prison for conspiracy and five years for false claims. Martinez faces a maximum of five years for identity theft, officials said.