DEPARTMENT OF JUSTICE
Acting United States Attorney Edward R. Ryan
Western District of North Carolina
FOR IMMEDIATE RELEASE
FRIDAY, OCTOBER 2, 2009
CONTACT: Terry Wilkinson
704.344-6222
Fax: 704.227.0264
TAX REFUND CONSPIRATORS SENTENCED TO PRISON AND ORDERED TO PAY $12,342,117 IN RESTITUTION Four Defendants Previously Entered Guilty Pleas in Connection with Tax Refund Fraud Conspiracy CHARLOTTE, NC—Jose Peralta, 32, of Shelby, NC; Miguel Loria, 37, of Lincolnton, NC; Richard Varela, 22, of Gastonia, NC; and Marino Martinez, 50, of Gastonia, NC were sentenced in U.S. District Court in Charlotte to terms of imprisonment for their involvement in a large scale tax refund fraud scheme. The defendants each pled guilty to three criminal counts including two conspiracy counts and one count of aggravated identity theft. The charges are contained in a bill of indictment filed November 19, 2008 in U.S. District Court for the Western District of North Carolina.
Peralta: 98 months’ imprisonment followed by a 3 year term of supervised release Loria: 63 months’ imprisonment followed by a 3 year term of supervised release Varela: 47 months’ imprisonment followed by a 3-year term of supervised release Martinez: 40 months’ imprisonment followed by a 3 year term of supervised release In addition, the defendants were ordered to pay restitution to the Internal Revenue Service of $12,342,117.
Today’s announcement is made by Acting U.S. Attorney Edward R. Ryan, Jeannine Hammett, Special Agent in Charge of the Internal Revenue Service-Criminal Investigation Division, Keith Fixel, Inspector in Charge of the Charlotte Division of U.S. Postal Inspection Service, Special Agent in Charge Russell F. Nelson of U.S. Secret Service, and Chief Tim Adams of the Gastonia Police Department.
According to the official court record, participants in the tax fraud scheme would use stolen identities and social security numbers of Commonwealth of Puerto Rico residents to file fraudulent tax returns. Social Security numbers assigned to residents of the Commonwealth of Puerto Rico are specifically targeted for use in obtaining fraudulent refunds because residents of Puerto Rico whose income derives solely from Puerto Rican sources are generally not required to file federal tax returns with the IRS. The fraudulent tax returns always claimed the filer was entitled to a tax refund. These fraudulent returns then caused the Treasury Department to mail false tax refund checks to various addresses throughout New York, North Carolina and elsewhere. The addresses listed on the fraudulent returns were sometimes clustered–a large number of addresses in the same apartment building, for example. Participants in the scheme would use fake identification documents to cash the fraudulently obtained tax refund checks.
The tax fraud conspiracy was carried out, in part, locally at money service businesses in Lincolnton and Gastonia, North Carolina. According to information brought before the court at today’s sentencing hearings, the defendants participated in this tax refund conspiracy beginning in January 2008. From January 2008 until mid-November 2008, the defendants were able to successfully obtain $12 million by cashing fraudulent tax refund checks through money service businesses in North Carolina. For example, Defendant Miguel Loria owned and operated La Libertad, Inc., a money service business located in Lincolnton, NC, and is responsible for having cashed false tax refund checks totaling approximately $2,600,000 at La Libertad. Another money service business, known as “L.D.,” located in Gastonia, was also utilized by defendants Martinez, Peralta, Loria and Varela to cash false tax refund checks during the same general time period.
Pursuant to plea agreements filed by these four defendants who participated in the conspiracy in the Western District of North Carolina, each one agreed to plead guilty to three criminal counts. A sentence received upon conviction in U.S. District court is influenced by the Federal Sentencing Guidelines. Courts consult the Guidelines in order to determine each defendant’s actual sentence, which is based upon a formula that takes into account the severity and characteristics of the offense and each defendant’s criminal history, if any. U.S. District Judge Martin Reidinger was the presiding judge at today’s sentencing hearings.
Acting U.S. Attorney Ryan credits the IRS-CID with leading the investigation that resulted in the filing of the original charges. Ryan also commended the U.S. Postal Service, U.S. Secret Service, and Gastonia Police Department for their participation and cooperation in the investigation. Assistant U.S. Attorneys Mark T. Odulio and Kenneth Smith of the U.S. Attorney’s Criminal Division in Charlotte handled the case for the government.
Criminal enforcement priorities of the Justice Department and the Internal Revenue Service include investigation of schemes that involve:
• Using trusts or other entities to conceal control over income and assets;
• Shifting assets and income to hidden offshore accounts;
• Making false statements to the IRS in order to claim tax refunds;
• Selling and promoting fraudulent tax avoidance schemes;
• Using frivolous justifications for not filing truthful tax returns;
• Failing to withhold, report and pay payroll and income taxes;
• Failing to report income on individual and corporate returns; and
• Failing to file tax returns.
Further details about additional recent tax enforcement cases are available by visiting the Web site of the U.S. Department of Justice at www.usdoj.gov and entering “Tax Division” in the search engine, on the IRS’s Web site www.irs.gov , or on the IRS Criminal Division’s Web site http://www.ustreas.gov/irs/ci/.
JOSE PERALTA, age 32
Shelby, NC
Plea agreement filed January 26, 2009
Guilty plea entered February 4, 2009
In custody since November 21, 2008
MIGUEL LORIA, age 37
Lincolnton, NC
Plea agreement filed March 17, 2009
Guilty plea entered March 30, 2009
In custody since November 21, 2008
RICHARD VARELA, age 22
Gastonia, NC
Plea agreement filed March 13, 2009
Guilty plea entered March 31, 2009
In custody since November 21, 2008
MARINO MARTINEZ, age 50
Gastonia, NC
Plea agreement filed February 27, 2009
Guilty plea entered February 27, 2009
In custody since November 26, 2008