Leader Of Scheme To Defraud IRS Using Stolen Puerto Rican Identities Sentenced In Manhattan Federal Court To Nine Years In Prison

Preet Bharara, the United States Attorney for the Southern District of New York, announced that CARLOS JOSE LUIS (“JOSE LUIS”), also known as Jose Quilestorres, was sentenced on Friday, March 24, 2014, in Manhattan federal court to nine years in prison for his role as the leader of a scheme to fraudulently generate and then steal more than $10 million in federal tax refund checks. JOSE LUIS pleaded guilty before U.S. District Judge Richard J. Sullivan in May 2013 to one count of each of: conspiracy to steal government funds, stealing government funds, aggravated identity theft, conspiracy to submit false claims to the United States, and submitting false claims to the United States. JOSE LUIS also pleaded guilty to similar charges in the District of New Jersey in November 2013, and that case was transferred to the Southern District of New York for sentencing. Judge Sullivan imposed the nine-year sentence based on JOSE LUIS’s guilty plea in both cases.

Manhattan U.S. Attorney Preet Bharara said: “Jose Luis stole people’s identities and used a corrupted Postal employee to perpetrate a multimillion-dollar tax fraud scheme. As the judge in this case correctly noted, stealing from the government may seem impersonal but everyone who is deprived of the good the government can do by that money being taken is a victim. This Office will not tolerate the wholesale thievery from the Treasury that this scheme was.”

According to the Indictment filed in Manhattan federal court, other court documents, and statements made during court proceedings:

JOSE LUIS operated a tax refund fraud mill from an apartment in the Bronx. Between January 2011 and September 2012, JOSE LUIS fraudulently claimed more than $10 million in IRS tax refund checks.

To fraudulently obtain the refund checks, JOSE LUIS would unlawfully obtain identifying information, including names, dates of birth, and social security numbers, of Puerto Rican citizens. Their stolen identities would then be used to claim large refunds from the federal government. Many of the checks in this particular scheme were sent to addresses in Shirley, New York, where a Postal Service employee was stealing United States mail containing tax refund checks. The checks generated by the fraudulent returns filed by JOSE LUIS were then cashed by other individuals, including four individuals charged in the Indictment filed in Manhattan federal court: Miguel Caceres, Felipe Duran Martinez, Ana Pimentel, and Emil Mejia.

In sentencing JOSE LUIS, Judge Sullivan remarked that “this is a crime that went on for a long time, the entire purpose of which was to steal from the government of the United States. On the one hand, that's . . . a very impersonal victim. . . . But it is a government that is designed to serve people and serve communities. And so the staggering amount of loss here . . . more than $10 million, if you think about what the government could do with that money . . . $10 million can do . . . an awful lot of good. . . . So there are victims to this crime. . . .”

Caceres pleaded guilty in April 2013 to conspiracy to steal government funds and to stealing government funds and was sentenced in November 2013 to 14 months in prison. Martinez pleaded guilty in April 2013 to similar charges and is awaiting sentence. Another individual linked to this organization and charged in the Indictment, Jairo Polanco, also pleaded guilty, in March 2013, and was sentenced in July 2013 to one year and one day in prison. Pimentel and Mejia remain at large. The charges against Pimentel and Mejia are merely accusations, and they are presumed innocent unless and until proven guilty.

Mr. Bharara praised the Internal Revenue Service and the United States Postal Inspection Service for their work on this case.

This case is being prosecuted by the Office’s General Crimes Unit. Assistant U.S. Attorneys Rahul Mukhi and Micah Smith are in charge of this prosecution.