Michigan Woman Admits Role In $65 Million Stolen Identity Income Tax Refund Fraud Scheme

NEWARK, N.J. – A Michigan woman today admitted her role in one of the nation’s largest and longest running stolen identity refund fraud schemes ever prosecuted, U.S. Attorney Paul J. Fishman announced.

Rosa Marmol, 36, of Grand Rapids, Mich., pleaded guilty today before U.S. District Judge Claire C. Cecchi, to a superseding information charging her with conspiracy to defraud the United States and theft of government property. Marmol had been previously indicted on these charges in February 2014.

According to documents filed in the case and statements made in court:

Stolen Identity Refund Fraud (SIRF) is a common type of fraud that results in more than $2 billion in losses annually to the U.S. Treasury. SIRF schemes generally share a number of hallmarks:

• SIRF 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 Individual Income Tax Return 1040 Forms using the fraudulently obtained information and falsifying wages earned, taxes withheld and other data. Perpetrators use data to make it appear that the “taxpayers” listed on the fraudulent 1040 form are entitled to tax refunds – when in fact, the various tax withholdings indicated have not been paid and no refunds are due;
• They direct the U.S. Treasury Department to issue the refunds through checks to locations they control or can access, in various ways;
• SIRF perpetrators generate cash proceeds. Some sell the checks at a discount to face value. The buyers then cash the checks at banks or check cashing businesses or deposit them into bank accounts.

Federal law enforcement agencies, recognizing that SIRF was a serious problem, created a multi-agency task force in New Jersey composed of investigators from the IRS and the U.S. Postal Inspection Service, along with the U.S. Secret Service, and with assistance from the Drug Enforcement Administration (the New Jersey Task Force).

An investigation led by the New Jersey Task Force with assistance from U.S. Immigration and Customs Enforcement, Homeland Security Investigations, has revealed that starting as early as 2007, dozens of individuals in the New Jersey and New York area have been engaged in large-scale, long-running SIRF scheme that has caused more than 8,000 fraudulent 1040 forms to be filed, seeking more than $65 million in tax refunds, with losses to the U.S. Treasury of more than $12 million.

Members of the conspiracy obtained personal identifiers, such as dates of birth and Social Security numbers, belonging to Puerto Rican citizens. They used those identifiers to create fake 1040s, which falsely reported wages purportedly earned by the “taxpayers” and taxes purportedly withheld, to create the appearance that the “taxpayers” were entitled to tax refunds. The returns were filed electronically. By tracing the specific IP addresses that submitted them, law enforcement officers learned just a handful of IP addresses created many of the fraudulent forms that led to the issuance of tax refund checks.

Marmol and the other members of the conspiracy then gained control of checks, sometimes bribing mail carriers to intercept checks and deliver them to other members of the conspiracy.  Marmol used the bank accounts of her family’s bodega and check cashing business, Tienda Guadalajara Jalisco, in Grand Rapids to negotiate the checks she cashed.

During the course of the investigation, members of the task force identified certain “hot spots” of activity and intercepted more than $22 million in fraudulently applied for refund checks before they were delivered to members of the conspiracy.

U.S. Attorney Fishman praised special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen; the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates; the U.S. Secret Service, under the direction of Special Agent In Charge James Mottola; and the Drug Enforcement Administration, under the direction of Acting Special Agent in Charge Carl Kotowski, for the investigation leading to today’s guilty plea.

The conspiracy count carries a maximum potential penalty of five years in prison and a $250,000 fine. The count of theft of government property carries a maximum potential penalty of 10 years in prison and up to a $250,000 fine. Sentencing is scheduled for Sept. 10, 2014.

The government is represented by Assistant U.S. Attorneys Danielle Alfonzo Walsman of the U.S. Attorney’s Office’s Health Care and Government Fraud Unit.

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Defense counsel: Damian Conforti Esq., Newark                                                                                                               

Marmol, Rosa Superseding Information