Manhattan U.S. Attorney Charges Five Individuals In Multi-Million Dollar Identity Theft Scheme Designed To Defraud The IRS
Defendants Allegedly Stole Identities of Puerto Rican Citizens and Filed for Tax Refunds in Their Names
Sixth Defendant Pled Guilty in August for His Role in the Scheme
Preet Bharara, the United States Attorney for the Southern District of New York, Toni Weirauch, the Acting Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), and Randall C. Till, the Acting Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced today the unsealing of a five-count complaint (the “Complaint”) charging five individuals with participating in a scheme to defraud the Internal Revenue Service (“IRS”) of at least $5 million using the stolen identities of Puerto Rican citizens. The Complaint was filed in connection with “Operation Mass Mail,” an ongoing investigation led by the IRS. JOSE ANGEL QUILESTORRES, MIGUEL CACERES, and FELIPE DURAN MARTINEZ were arrested today and will be presented in Manhattan federal court before U.S. Magistrate Judge Gabriel W. Gorenstein. ANA PIMENTEL and EMIL MEJIA remain at large. A sixth defendant, JUAN FRANCISCO HERNANDEZ, who was previously charged in a separate complaint and pled guilty in August 2012 for his involvement in the scheme, is also in custody.
Manhattan U.S. Attorney Preet Bharara said: “Schemes like the one alleged in this case have become an epidemic, robbing hundreds of millions of dollars every year from IRS coffers. At a time of soaring deficits and shrinking government budgets, losing this revenue is especially devastating and will not be tolerated. We have already charged more than 50 defendants with crimes like the ones we allege today, and our work continues unabated. ”
IRS-CI Acting Special Agent-in-Charge Toni Weirauch said: “Protecting taxpayer money is something IRS-Criminal Investigation takes very seriously. In fact, an integral part of IRS-Criminal Investigation’s mission is the detection and investigation of fraudulent tax refund claims and schemes, which defraud the government and steal from the taxpaying public. Accordingly, we will continue to work with our law enforcement partners on the ongoing ‘Operation Mass Mail’ investigation.”
USPIS Acting Inspector-in-Charge Randall C. Till said: “The arrest of these individuals for participating in a scheme to defraud the IRS and Puerto Rican residents, is an example of the commitment of Postal Inspectors and their federal counterparts to stamp out crime wherever it exists; keeping the mail safe and secure for its employees and customers.”
The following allegations are based on the Complaint unsealed today in Manhattan federal court:
QUILESTORRES operated a tax refund fraud mill from an apartment in the Bronx, New York, (the “Apartment”). To date, the IRS has identified more than $5,000,000 in fraudulently issued tax refund checks filed from IP addresses linked to the Apartment. To file the fraudulent returns, QUILESTORRES 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 file income tax returns with the IRS in which they claimed they were owed large refunds from the federal government. QUILESTORRES is believed to have directed the resulting tax refund checks to addresses he controlled, or along specific mail routes assigned to U.S. Postal Service employees who had been bribed to pull the checks from the mail.
Many of the checks in this particular scheme were sent to addresses in Shirley, New York, where a Postal Service employee was recently charged with stealing United States mail containing tax refund checks. The checks generated by the returns filed by QUILESTORRES were then cashed by other individuals, including the four other defendants charged in the Complaint – CACERES, MARTINEZ, PIMENTEL, and MEJIA (the “Check Cashers”). Each of the Check Cashers deposited hundreds of thousands of dollars of fraudulently obtained tax refund checks in commercial bank accounts at a particular bank branch in the Bronx. Many of the refund checks deposited by the Check Cashers were addressed to addresses in Shirley, New York.
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QUILESTORRES, 46, of the Bronx, New York, is charged with conspiracy to steal government funds, theft of government funds, aggravated identity theft, conspiring to defraud the United States, and filing false claims with the United States. He faces a maximum sentence of 32 years in prison. CACERES, 60, MARTINEZ, 30, PIMENTEL, 36, and MEJIA, 36, also reside in the Bronx and are charged with conspiracy to steal government funds, theft of government funds, and aggravated identity theft. They all face maximum terms of 17 years in prison.
HERNANDEZ, 29, of Bayonne, New Jersey, pled guilty on August 22, 2012, to one count of conspiracy to steal government funds and one count of theft of government funds in connection with depositing more than $2 million in fraudulently issued tax refund checks. He faces 15 years in prison and is scheduled to be sentenced by U.S. District Judge. Barbara S. Jones on December 7, 2012.
Mr. Bharara praised the outstanding investigative work of IRS-CI and USPIS.
The prosecution is being overseen by the Office’s General Crimes Unit. Assistant U.S. Attorneys Rahul Mukhi and Micah Smith are in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.