Ringleader Of Tax Refund Check Scam Admits $2.6 Million Conspiracy
NEWARK, N.J. - The ringleader of a conspiracy to steal income tax refund checks issued by the United States today admitted his role in the scheme, which led to the theft of more than $2.6 million from the government, U.S. Attorney Paul J. Fishman announced.
Raymundo Hernandez, 35, of Bronx, New York, pleaded guilty before U.S. Magistrate Judge Michael A. Hammer in Newark federal court to an information charging him with conspiracy to steal government funds.
According to the documents filed in this case and statements made in court:
Stolen Identity Refund Fraud (SIRF) is a common type of fraud committed against the United States government that results in more than $2 billion in losses annually. SIRF schemes generally share a number of hallmarks. 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 IRS-1040 tax return forms using the fraudulently obtained information and falsifying wages earned, taxes withheld and other data, always ensuring that fraudulent tax return generates a refund. The perpetrators then direct the U.S. Treasury Department to mail the refund checks to locations they control or can access. In some cases, they bribe mail carriers to remove the refund checks from their mail routes. With the fraudulently obtained refund checks in hand, the perpetrators generate cash proceeds by depositing the checks into bank accounts they control.
Hernandez admitted he knew the checks had been generated by conspirators filing false and fraudulent income tax returns with the IRS in order to obtain refunds to which he was not entitled. He admitted that from November 2010 through October 2012 he recruited and maintained a network of conspirators in the Newark and Bronx areas and distributed fraudulent treasury checks to that network in exchange for payment. Hernandez obtained at least 44 such checks from Luis Pena, 32, of Bronx, who pleaded guilty to his role in the conspiracy in March 2014. Pena had arranged for the fraudulent checks to be sent to a postal route and intercepted by the mail carriers on that route: Gloria Rivera 40, of Bronx, and Lourdes Ortiz, 41, of Bronx, Rivera and Ortiz also entered guilty pleas in March 2014 to their respective roles in the conspiracy.
Hernandez admitted that once he distributed the fraudulent checks, he and his conspirators deposited them into bank accounts, primarily in the names of businesses they controlled and then withdrew large amounts of the proceeds in cash. They used some of the money to purchase cars and gamble at Atlantic City casinos.
The fraudulently cashed checks totaled $2,659,718. Of these deposits, $171,589 was deposited into three bank accounts under Hernandez’ direct control.
The conspiracy count carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing before U.S. District Judge Faith S. Hochberg is currently scheduled for Nov. 6, 2014.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen; postal inspectors of the U. S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates; special agents of the U.S. Secret Service, under the direction of Special Agent in Charge James Mottola; and special agents of the U.S. Postal Service - Office of Inspector General, under the direction of Special Agent in Charge Rafael A. Medina, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Sara F. Merin of the U.S. Attorney’s Office General Crimes Unit in Newark.
Defense counsel: Roy Greenman Esq., Union, N.J.