Lizzie Mulder Fraud Case: Victims, Sentence, and BofA Lawsuit

The Lizzie Mulder fraud case involved Elizabeth Jane “Lizzie” Mulder, a San Juan Capistrano bookkeeper who stole more than $1.5 million from Orange County small-business clients between 2009 and 2017 by having them write checks to a fictitious entity she controlled called “Income Tax Payments.” She pleaded guilty in June 2017 to wire fraud and filing a false income tax return, and in October 2017 was sentenced to 63 months in federal prison and ordered to pay $1,538,781 in restitution.¹

How the Scheme Worked

Mulder operated under the business name “Mulder Financial Consulting” from roughly July 2009 through the spring of 2017.² She presented herself as a small-business accountant and claimed a degree from Pepperdine University. Neither was true. She was not a CPA, had only taken some community college accounting classes, and had actually worked for a soil and fertilizer company.³

The core of the fraud was straightforward. Once Mulder had a client’s trust, she told them to write checks payable to “Income Tax Payments,” representing that the money would cover their federal, state, or local taxes. She had opened a bank account under that fictitious name and simply deposited the checks for her own use.²

She also ran variations. She created fake email accounts and posed as investors or representatives of other companies to trick at least one client into paying fabricated business expenses. In another case, she obtained power of attorney over a client’s accounts and drained them under the pretense of handling costs tied to the sale of the client’s company.¹ Laguna Beach police later found an app on her phone capable of disguising her voice, which investigators believed she used to impersonate others.⁴

Who She Stole From

Mulder’s targets were Orange County small businesses, and she cultivated the owners socially before and during the theft. Laguna Beach detective Jordan Mirakian described the victims as “entrepreneurial women with small businesses” who all had young children. She hosted parties and dinners for them and even attended one owner’s wedding in Italy.⁵

Named victims included:

JAC Wines, a San Clemente and Laguna Beach startup whose owner Jay Avery promoted Mulder to chief financial officer. She skimmed about $185,000, and the business failed.⁶
Kurtz-Ahlers & Associates, a San Juan Capistrano travel agency she bled of more than $700,000 over five years through the “Income Tax Payments” check scheme.⁷
Andra Builders, Inc. of Costa Mesa, named in federal charging documents without a separate loss figure disclosed.²

Laguna Beach police also identified Toni & Guy Hair Salon in Newport Beach, Bella Pilates in San Clemente, and California Print 2 Copy in Irvine among the businesses she victimized.⁴ Prosecutors put the total theft at roughly $1,538,771, and the sentencing court identified seven victims, including the Internal Revenue Service.¹

Where the Money Went

Prosecutors characterized Mulder’s spending as “personal aggrandizement.” She rented a home in the hills above Laguna Beach with a beach view, paid for cosmetic surgery she described as a “mommy makeover,” took vacations, and bought a pair of Arabian horses from elite bloodlines along with related equipment.¹ All of it was funded by money her clients believed was going to the IRS or to legitimate business costs.

How She Was Caught

The scheme collapsed in January 2016 when Jay Avery of JAC Wines reported to the Laguna Beach Police Department that he suspected his accountant had stolen $200,000.⁸ Economic crimes detectives opened a case on January 26, 2016, under Detective Mirakian. Search warrants at Mulder’s home and subpoenas for her bank records revealed additional victims across Orange County.⁴ The FBI and IRS Criminal Investigation joined, and the case moved to federal court in the Central District of California.¹

The Plea and Sentence

Mulder signed a plea agreement on May 15, 2017, and pleaded guilty on June 12, 2017, to two federal felonies: wire fraud and subscribing to a false income tax return. The tax charge reflected her failure to report the stolen funds as income.² She had faced a statutory maximum of 23 years in prison and $350,000 in fines.³

On October 16, 2017, U.S. District Judge David O. Carter sentenced her to 63 months in federal prison and ordered $1,538,781 in restitution to seven victims, including the IRS.¹

The Bank of America Lawsuit

The fraud produced a notable civil case. Kurtz-Ahlers, which lost over $700,000, sued Bank of America, arguing the bank should have detected the scheme. Mulder and Kurtz-Ahlers held accounts at the same branch, and Mulder had added “Income Tax Payments” as a “doing business as” designation on her personal account there. Kurtz-Ahlers argued that the name itself was inherently suspicious and that the repeated deposits should have been flagged.

The trial court granted Bank of America’s motion for nonsuit, and on May 8, 2020, the California Court of Appeal, Fourth District, Division Three, affirmed. Justice Richard M. Aronson held that a bank has no common-law duty to monitor a depositor’s account for the benefit of a third party.⁷ The court rejected the argument that the narrow duty-of-inquiry exception in Sun ‘n Sand, Inc. v. United California Bank (1978) applied. That exception covers checks payable to a bank and presented by a third party for their own benefit, which was not the situation here, because the checks were payable to the name on Mulder’s account and endorsed by her.

The court added a policy rationale: requiring banks to police depositor accounts would compromise customer privacy and interfere with the automated processing banking rules require. It also observed that Kurtz-Ahlers itself had failed to notice five years of diverted tax payments through a lack of “basic prudence,” and that the burden of catching such fraud falls on the client, who can perform background checks and monitor records.⁹

Kurtz-Ahlers did obtain a separate state court judgment against Mulder herself on June 25, 2019, in Orange Superior Court, for $3,188,857.83.⁹ Public reporting does not indicate whether any portion of that judgment or the federal restitution order has been collected.

1
U.S. Department of Justice. San Juan Capistrano Businesswoman Who Stole More Than $1.5 Million From Clients Sentenced to Over 5 Years in Federal Prison
2
U.S. Department of Justice. San Juan Capistrano Woman Pleads Guilty to Stealing Over $1.5 Million From Clients of Her Orange County Accounting Business
3
Mercury News. O.C. Woman Who Stole Money to Pay for Cosmetic Surgery, Rental Home and Vacations Pleads Guilty to Embezzlement
4
Los Angeles Times. Laguna Beach Woman Pleads Guilty in Embezzlement Scheme
5
Orange County Register. O.C. Woman Who Stole Money to Pay for Cosmetic Surgery, Rental Home and Vacations Pleads Guilty to Embezzlement
6
CNBC. To Prevent Fraud in Your Small Business, Think Like a Big Corporation
7
FindLaw. Kurtz-Ahlers LLC v. Bank of America N.A.
8
Patch. Laguna Beach Resident Charged With Defrauding Orange County Businesses Over $1.5 Million
9
Metropolitan News-Enterprise. Court of Appeal Rules Bank Had No Duty to Detect Bookkeeper Fraud