Bronx, N.Y. Man Admits To Stealing $342,590 In Tax Refund Checks

NEWARK, N.J. - A New York man admitted today that he stole more than $340,000 in fraudulently obtained income tax refund checks issued by the United States, U.S. Attorney Paul J. Fishman announced. 

Isaias Hernandez, 40, of Bronx, New York, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to Count Three of an indictment charging him with theft of government funds.

According to the documents filed in this case and statements made in Court:

Hernandez admitted stealing $342,590 from February 2012 through May 2012.  Many of the fraudulently obtained income tax refund checks were deposited, with the proceeds withdrawn, in Hamilton, New Jersey.

Stolen Identity Refund Fraud (SIRF) is a common type of fraud committed against the United States government that results in more than $2 billion in losses annually. SIRF schemes generally share a number of hallmarks.  Perpetrators obtain personal identifying information, including Social Security numbers and dates of birth, from unwitting individuals, who often reside in the Commonwealth of Puerto Rico.  They complete IRS-1040 tax return forms using the fraudulently obtained information and falsifying wages earned, taxes withheld and other data, always ensuring that fraudulent tax return generates a refund.  The perpetrators then direct the U.S. Treasury Department to mail the refund checks to locations they control or can access.  In some cases, they bribe mail carriers to remove the refund checks from their mail routes.  With the fraudulently obtained refund checks in hand, the perpetrators generate cash proceeds by depositing the checks into bank accounts they control.

Hernandez admitted that he knew that the 48 double-endorsed tax refund checks he and others deposited into a bank account under his direct control did not belong to him or to the company named on the bank account.  He admitted to personally withdrawing from that bank account $98,020 in cash and $99,700 in bank checks made out to an automobile auction.  Hernandez admitted using money from the bank account for personal expenses, including but not limited to payments for an insurance school class and the purchase of liquor and clothing.  He also admitted that he knew that the checks were issued by the IRS and the United States Treasury, and that it was illegal to deposit the tax refund checks and use the proceeds for his own benefit. 

Hernandez was originally charged with six co-defendants (Luis Pena, Lourdes Ortiz, Raymundo Hernandez and Gloria Rivera of Bronx; Wellington Feliz and Fausto Bernard of Newark) in a criminal complaint alleging conspiracy to commit theft of government funds, relating to a SIRF scheme that caused more than $2.6 million in losses to the United States government.  Of the originally charged defendants, four (Pena, Rivera, Ortiz and Raymundo Hernandez) pleaded guilty to and have been sentenced for their roles in the conspiracy, and one pleaded guilty to and was sentenced for a misprision of felony related to his failure to report the conspiracy (Bernard).  One additional conspirator, Angel Fernandez of Newark, was charged in a separate complaint and also pleaded guilty to charges regarding his participation in the conspiracy. All have been ordered to pay restitution to victims and forfeiture to the United States.  The remaining defendant, Feliz, who is named in the indictment with Hernandez, is a fugitive.

The charge to which Hernandez pleaded guilty carries a maximum penalty of 10 years in prison and a fine of the greater of $250,000, twice the gross amount of any pecuniary gain that any persons derived from the offense; or twice the gross amount of any pecuniary loss sustained by any victims of the offense. 

U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; special agents of the U.S. Secret Service, under the direction of Acting Special Agent in Charge Kenneth Pleasant; and special agents of the U.S. Postal Service – Office of the Inspector General, under the direction of Special Agent in Charge Eileen Neff; and inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge James R. Ball, with the investigation leading to today’s guilty plea.

Sentencing before U.S. District Judge Madeline Cox Arleo is scheduled for May 2, 2016.

The government is represented by Assistant U.S. Attorneys Sara F. Merin and Joyce M. Malliet of the U.S. Attorney’s Office Criminal Division in Newark.

Defense counsel:   Stephen Turano, Esq., Newark, N.J.