U.S. Attorney and IRS Announce Latest Arrest in Operation Point Break, Targeting Federal Income Tax Refunds Obtained with Stolen Identities
BOSTON – U.S. Attorney Carmen M. Ortiz announced the latest arrest today in Operation Point Break, a long-term and previously unpublicized investigation into thieves who use stolen identities to file for and obtain fraudulent federal income tax refunds, also known as “stolen identity refund fraud” (SIRF).
In a typical SIRF transaction, the SIRF conspiracy steals the identity of a U.S. citizen and files a fraudulent federal income tax return in his or her name, using false wage and tax-withholding data that, if true, would entitle the person to a sizeable tax refund, often worth thousands of dollars. The fraudulent refund never goes to the identity theft victim, but rather to the SIRF conspiracy, either in the form of a paper U.S. Treasury check mailed to an address specified on the fraudulent tax return, an address that the SIRF conspiracy controls, or in the form of an electronic deposit onto a prepaid debit card owned by the SIRF conspiracy. The conspiracy then converts the fraudulent refund into cash. If the fraudulent refund comes by check, a co-conspirator brings it to another co-conspirator, an employee of a bank or check-cashing company who cashes the check, even though the person presenting the check and the person to whom the check was issued are not the same. Each co-conspirator — the original identity thief, the tax return filer, the “runner” of the check to the bank or check-cashing company, and the bank or check-cashing company employee — takes a cut of the refund.
Operation Point Break has targeted SIRF conspiracies for two-and-a-half years.
Its most recent success was the arrest earlier today of Junior Albert Lopez, 30, of Dorchester, on a five-count indictment alleging that as part of a SIRF conspiracy, Lopez kept at his Dorchester apartment a USB flash drive that contained more than 700 individuals’ identity information, Employer Identification Numbers, and tax tables for creating false Forms W-2, and spreadsheets used to track the filing of fraudulent returns. The indictment alleges Lopez’s SIRF conspiracy used these identifiers to file more than $750,000 in fraudulent tax returns with the IRS. The indictment also charges Lopez with possessing 27 prepaid debit cards found hidden in a wall at his apartment in February 2013, with making fraudulent purchases using two of those debit cards, and with using an identity theft victim’s name, date, and Social Security Number in relation to the scheme. If convicted, Lopez faces a statutory maximum sentence of 10 years in prison, and a maximum fine of $250,000 on each of the indictment’s first four counts and a mandatory, two-year consecutive sentence on the final count.
Prior successes of Operation Point Break include the conviction of four bank employees who cashed SIRF checks or deposited them into co-conspirator’s bank accounts, and often falsified bank records to cover their tracks. On April 1, 2015, Cynthia Mansfield, a bank manager, was sentenced to five years of probation, including 11 months of in a residential re-entry center, and full restitution for cashing 138 Treasury tax refund checks worth $993,158. In December 2014, Mildred Martinez, a bank employee, was sentenced to three years of probation, including six months in home detention, and full restitution for cashing 31 Treasury tax refund checks worth $226,349. In November 2014, Danielle Pazi, another bank employee, was sentenced to 11 months in prison, two years of supervised release, and full restitution for cashing 162 Treasury checks worth $1,147,216. Pazi’s charges included taking responsibility for the SIRF checks that she supplied to her coworker, Gregory Guertin, an assistant bank manager, who in December 2014 was sentenced to time-served and supervised release for three years, and full restitution for cashing 20 Treasury checks worth $137,673. As a result of committing these offenses, all of the bank employees lost their jobs.
Three other defendants have pleaded guilty in connection with the checks given to Pazi and Guertin. In January 2015, Oscar Demota of Worcester was sentenced to 11 months in prison for supplying Pazi and Guertin more than $400,000 in fraudulently obtained tax refund checks to cash at the bank. Demota’s co-conspirator in more recent SIRF crimes, Nancy Hernandez, is scheduled to be sentenced in June 2015. Another co-conspirator, Maties Toribio, pleaded guilty in February 2015 in the Southern District of New York, and is also awaiting sentencing.
In another case prosecuted under Operation Point Break, seven defendants pleaded guilty in the District of Massachusetts in connection with a scheme to steal customer data from a local health insurance company and use the data to file fraudulent tax returns and to steal Social Security benefits. In August 2014, Emeline Lubin of Boston, pleaded guilty to stealing customer data from a local health insurance company where she was employed. She transmitted the data to Sniders Jean-Jacques of Florida. The data was then used to file fraudulent tax returns and to steal Social Security benefits. The tax refunds and Social Security benefits, which were obtained using the identities of 45 individuals and which totaled more than $100,000, were directly deposited into banks in Worcester. A team of couriers, including Juanita Hall, Shantelle Smith, Natalia Santana, and Brittany Davis withdrew the money from the accounts. The couriers were recruited and managed in part by Marvin Lubin, who is Emeline Lubin’s brother. Jean-Jacques is serving two years in prison; Marvin Lubin is serving one year in prison; Hall, Smith, and Santana were sentenced to terms of supervised release; and Emeline Lubin and Brittany Davis are awaiting sentencing.
Joining Ortiz in the announcement were William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations Boston; Scott Antolik, Special Agent in Charge of the Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division; Phillip Coyne, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of the Inspector General; Lisa A. Quinn, Special Agent in Charge of the U.S. Secret Service; and Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston.
Operation Point Break is being prosecuted by Assistant U.S. Attorneys Scott L. Garland, formerly of Ortiz’s Cybercrime Unit, and currently of Ortiz’s Anti-Terrorism and National Security Unit; Sean Delaney of the District of Maryland; Special Assistant U.S. Attorney Timothy Landry of Ortiz’s Major Crimes Unit; Seth B. Kosto of Ortiz’s Cybercrime Unit; and Jordi de Llano Campos of Ortiz’s Major Crimes Unit.
The details contained in charging documents are allegations. Defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.