North Texas Tax Fraud: Mother-Son Team Indicted

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Federal authorities in North Texas announced actions Friday in two unrelated tax fraud cases, one involving the indictment of a mother-and-son tax preparation team and the other resulting in lengthy prison sentences for three family members convicted of a multimillion-dollar refund scheme.

Jessie Badillo, 60, and her son, Manuel Badillo, 37, both of Lancaster, were indicted on March 24 on charges of conspiring to defraud the United States through their businesses, JES Financial Service and Manny Financial Services in DeSoto. From 2020 through 2024, the pair allegedly fabricated itemized deductions such as medical and dental expenses or invented businesses with large losses to generate false refunds, according to the indictment.

Jessie Badillo faces one count of conspiracy, 40 counts of aiding and assisting in the preparation of false tax returns, and two counts of subscribing to her own false returns. Manuel Badillo was charged with conspiracy and 25 counts of aiding and assisting in the preparation of false returns. Each count of aiding and abetting carries a maximum of 3 years in prison; the conspiracy charge carries up to 5 years.

U.S. Attorney Ryan Raybould said the case underscores the damage caused when tax preparers betray public trust.

“Tax preparers occupy a position of trust in our system. We trust that they will accurately and honestly prepare tax returns. When that trust is violated, through the fictitious creation of deductions and expenses, they don’t just fail their clients, they fail the American people,” Raybould said.

“This is theft from the honest American taxpayer. The indicted defendants are alleged to have done that, and we will vigorously prosecute this case and other tax cheats in North Texas.”

Special Agent in Charge Christopher J. Altemus of the IRS Criminal Investigation Dallas Field Office added that the filing season makes such violations especially harmful.

“During the filing season, it is especially important that taxpayers are able to trust their return preparers,” Altemus said. “Jessie and Manuel Badillo allegedly violated that trust in an attempt to line their own pockets. IRS-CI will continue to pursue return preparers who exploit their clients and undermine the tax system.”

In a separate case, three family members from the Arlington area were sentenced on Friday after a jury convicted them of running a multimillion-dollar refund fraud operation that used phony trusts. David Hunt received 92 months in prison, his son Baylon Hunt was sentenced to 38 months, and Baylon’s half-brother Corey Burt, formerly of Long Beach, Mississippi, received 94 months. A fourth family member convicted at the same trial is scheduled to be sentenced in May.

Court records showed the group filed tax returns in the names of trusts they controlled, seeking more than $8.5 million in refunds to which the trusts were not entitled. Baylon Hunt and another family member submitted falsified financial instruments and altered money orders even after receiving IRS warning letters to stop. The scheme netted the conspirators more than $1.7 million, which they used to buy luxury goods, furniture, cryptocurrency, a Cadillac Escalade, and a house in Mississippi.

All four defendants were convicted of conspiracy to defraud the United States. David Hunt, Burt, and the fourth family member were also convicted of multiple counts of aiding and assisting in the preparation of false tax returns; Baylon Hunt was acquitted of two such counts. The three were sentenced on March 27 and were jointly ordered to pay $1,774,864 in restitution to the United States.

The Badillo case was investigated by IRS Criminal Investigation and is being prosecuted by Special Assistant U.S. Attorney Ignacio Perez de la Cruz.

The Hunt-Burt case was investigated by IRS Criminal Investigation and prosecuted by Trial Attorneys Melissa Siskind and Daniel Lipkowitz of the Justice Department’s Tax Section and Assistant U.S. Attorney Mark McDonald of the Northern District of Texas.