LOS ANGELES (CNS) – A Lancaster man pleaded guilty  to federal charges stemming from his creation of fake businesses in order to receive illegal tax refunds and unemployment insurance benefits.

Carl Steven Artis, 54, formerly of North Hollywood, entered the plea in Los Angeles to one count each of mail fraud and false claims against the United States government.

Artis admitted he operated the scheme to defraud the California Employment Development Department of unemployment insurance benefits from at least the summer of 2010 to last August.

The defendant acknowledged he registered fictitious companies with the EDD, submitted false wage information for people whom he falsely claimed worked for these companies, and then fraudulently applied for and obtained unemployment insurance benefits in the names of these phony employees.

At the same time, Artis obtained social security numbers and dates of birth from persons held in state or federal custody and other individuals whose identities were used as part of the scheme.

He then filed fake claims for unemployment insurance benefits for these people. Contrary to Artis’ submissions to the EDD, none of the individuals ever worked for the fake companies, none ever received the wages that Artis reported to EDD, and none lived at the addresses that were listed on forms filed with the EDD.

Artis submitted about 60 false claims to EDD seeking roughly $815,000 in unemployment insurance benefits, resulting in losses to EDD of about $500,000.

In addition to the unemployment insurance scheme, Artis defrauded the Internal Revenue Service through the submission of fake tax returns seeking refunds.

In perpetrating the tax fraud, Artis used the identities of people and businesses used in the EDD scheme, authorities said.

For each of the fake taxpayers, Artis generated fictitious W-2 forms in the names of the fake taxpayers, falsely claiming the companies that he invented for the sole purpose of the fraud paid wage income to the fake taxpayers, and falsely claiming that taxes were withheld from the fictitious income in excess of the amount owed.

Artis then caused false tax returns to be filed in the names of the fake taxpayers seeking a tax refund.

In total, Artis filed about 80 fraudulent income tax returns with the IRS, falsely claiming a total of nearly $500,000 in tax refunds. The IRS paid out almost $100,000 in false claims before the scheme was discovered.

Artis faces up to 25 years in prison, plus fines and restitution, at sentencing on May 18.