Iris Rabaya Au set up companies and bank accounts used in the operation of a self-styled crypto “Godfather.” After moving more than $2.6 million into her personal accounts without reporting it, she pleaded guilty to a false-return charge and received 18 months in prison.
Show Notes:
Iris Rabaya Au formed shell companies and opened bank accounts at the direction of her then-boyfriend, Adam Iza, who called himself “The Godfather.” According to the government’s account of her plea, funds moving through those accounts paid approximately $1 million to sheriff’s deputies, supported nearly $10 million in recreational spending, and purchased approximately $16 million in cryptocurrency for Iza.
Au admitted transferring more than $2.6 million from the company accounts into her personal accounts between 2020 and 2023 and willfully failing to report that income. Prosecutors also argued that she concealed entities and income from her tax preparer. She pleaded guilty to subscribing to a false return. On September 21, 2026, she was sentenced to 18 months in prison, ordered to pay $1,484,343 in restitution, and ordered to forfeit luxury assets.
I follow the accounts behind the spending, distinguish money moved for someone else from money received personally, and explain why a preparer needs the complete financial picture before a taxpayer signs a return.
Key Takeaways
- Reconcile transfers into personal accounts separately from payments made for an entity or another person.
- Give the return preparer a complete list of relevant entities and accounts.
- Support labels such as “loan” or “reimbursement” with records showing what happened.
- Compare the completed return against the underlying account reconciliation before signing.
- Coordinate tax corrections with the broader defense when funds may have an illegal source.
- The IRS Criminal Investigation Voluntary Disclosure Practice excludes taxpayers with illegal-source income.
Resources Mentioned
Central District of California sentencing account: Au’s sentence, admitted transfers, forfeiture, and prosecutors’ preparer-concealment argument.
Central District of California plea announcement: The government’s account of what Au agreed to admit.
IRS-CI case account: Agency account of Au’s disposition and the financial structure.
Related Saavedra sentencing account: A separate recipient’s false-return case within Iza’s operation.
26 U.S.C. § 61: Gross income from whatever source derived.
26 U.S.C. § 7206(1): Willfully subscribing to a materially false return under penalties of perjury. The official case accounts describe Au’s offense as false subscription; the filed charging document was unavailable for this draft.
Rutkin v. United States, 343 U.S. 130 (1952): The Supreme Court held that extorted funds can be taxable income when the recipient controls and derives economic value from them. This is a comparison of tax principles, not a ruling about Au.
IRS Criminal Investigation Voluntary Disclosure Practice: Current eligibility guidance, including its illegal-source-income exclusion.