SIOUX FALLS, S.D. (AP) — Nine people in South Dakota and Florida, including four former University of South Dakota football players and one current team member, have been indicted by a federal grand jury for tax fraud conspiracy and identity theft, prosecutors said Friday.

The defendants are accused of stealing people’s identities and filing bogus income tax returns showing about $1.1 million in refunds due, said Brendan Johnson, the U.S. attorney for South Dakota. The Internal Revenue Service paid fraudulent claims of about $500,000 before the scheme was uncovered, Johnson said.

Current USD football player Christopher Lundy is among the defendants. The 20-year-old sophomore defensive back from Tampa, Fla., was arrested Thursday in South Dakota along with Terry Liggins, a former track athlete at USD.

Five others were arrested Thursday in the Tampa area, including three former USD football players. Two other suspects had yet to be arrested Friday, according to Johnson.

Lundy and Liggins appeared before a federal magistrate on Thursday, pleaded not guilty and were released pending trial.

The five arrested in Florida appeared before a magistrate judge there Thursday. They were released and ordered to appear in federal court in South Dakota on Dec. 10, Johnson said.

USD spokeswoman Tena Haraldson told The Associated Press no formal disciplinary action has been taken against Lundy but that he will not play Saturday when the team takes on in-state rival South Dakota State “due to the circumstances.”

“The university feels it’s best for him not to play,” she said. Lundy still is enrolled as a student.

Haraldson said the university has been cooperating in the investigation over the past year.

“We’ve been aware for some time that there has been an investigation going on,” she said. “We didn’t know until (Johnson’s) press release came out (Friday) who all the names were that were on the list.”

One of the five arrested in Florida, former USD football player Alphonso Valdez, is accused by the IRS of being the leader of the fraud scheme, according to the Tampa Tribune. Assistant U.S. Attorney Sara Sweeney told U.S. Magistrate Anthony Porcelli that Valdez recruited students at USD and people he knew in Tampa to gather names, addresses and other identifying information, and used that information to file the fraudulent tax returns.

Sweeney told Porcelli the scam came to light when Valdez used preloaded debit cards to withdraw $900 in cash from an ATM in South Dakota. Valdez tried to hide his identity by wearing sunglasses and a stocking cap, she said. Authorities say people committing tax refund fraud frequently direct that the fraudulent refunds be deposited on debit cards.

Valdez’s lawyer said in court that Valdez now plans to attend the University of Tennessee, where he has been accepted on a football scholarship.

The conspiracy charge carries a maximum sentence upon conviction of 10 years in prison and a $250,000 fine. The identity theft charge has a maximum punishment of two years in prison.

Copyright 2012 The Associated Press.