Six People Charged In Connection With Large-Scale Stolen Identity Refund Fraud Scheme

NEWARK, N.J. – Six people allegedly involved in an extensive scheme to obtain millions of dollars through fraudulently obtained refund checks issued by the U.S. Treasury were charged today for their involvement in the scam, U.S. Attorney Paul J. Fishman announced.  

Julio C. Concepcion, 48; Angel L. Concepcion-Vasquez, 29; Jose R. Zapata, 65; and Reyes Flores-Perez, 29, all of Passaic, N.J.; and Romy E. Quezada, 22, of Lake Mary, Fla., were arrested this morning by special agents of IRS-Criminal Investigation, postal inspectors from the U.S. Postal Inspection Service, and special agents of the U.S. Secret Service. A sixth defendant, Freddy Gabino-Martinez, 24, of Passaic, remains at large. Concepcion, Concepcion-Vasquez, Gabino-Martinez, and Zapata are charged with conspiracy to steal government funds, Flores-Perez is charged with transferring false identification documents, and Quezada is charged with theft of government funds.

The four defendants arrested in New Jersey are expected to make their initial appearances this afternoon before U.S. Magistrate Judge Michael Hammer in Newark federal court. Quezada was arrested in Florida and will make her initial appearance in Orlando federal court.

According to the criminal Complaints unsealed today:

Background on Stolen Identify Refund Fraud

Stolen Identity Refund Fraud (SIRF) is a common type of fraud committed against the United States government that results in more than $2 billion a year in losses 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.

• SIRF perpetrators complete Form 1040 tax returns using the fraudulently obtained information and falsifying wages earned, taxes withheld, and other data, always ensuring that the fraudulent tax return generates a refund.

• They direct the U.S. Treasury Department to mail refund checks to locations that the perpetrators control or can access.

• With the fraudulently obtained refund checks in hand, SIRF perpetrators generate cash proceeds by depositing the checks into bank accounts that they control.

The Investigation

From October 2009 through December 2012, Concepcion, Concepcion-Vasquez, Gabino-Martinez, and Zapata engaged in a SIRF scheme that resulted in more than $2.5 million in losses to the U.S. Treasury. The conspirators obtained fraudulent tax refund checks, then deposited them into bank accounts that they controlled, often in the name of “dummy” corporations created to facilitate the scheme. They then transferred hundreds of dollars to others, including Concepcion’s wife, his children, and his children’s companions. Quezada is charged with depositing fraudulent treasury checks into an account that she opened and controlled, and Flores-Perez is charged with transferring fraudulent identification documents, including fake driver’s licenses and Social Security cards, used to further the SIRF scheme. 
                                                                                                                                                      
The conspiracy charge and the theft of government funds charge are punishable by a maximum potential penalty of 10 years in prison. The transfer of fraudulent documents charge is punishable by a maximum potential penalty of 15 years in prison. All charges are also punishable by a fine of up to $250,000, or twice the gain or loss caused by the offense.     

U.S. Attorney Fishman credited special agents of the IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; 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 the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia M. Valdes, with the investigation leading to today’s arrests and charges.

The government is represented by Assistant U.S. Attorney Andrew J. Bruck of the U.S. Attorney’s Office Organized Crime/Gangs Unit in Newark.

The charges and allegations contained in the Complaints are merely accusations, and the defendants are considered innocent unless and until proven guilty.

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Defense counsel:
Concepcion: Paulette Pitt Esq., Perth Amboy, N.J.
Concepcion-Vasquez: Rubin Sinins Esq., Newark
Zapata: Elizabeth Smith Esq., Mendham, N.J.
Flores-Perez: John Whipple Esq., Chatham, N.J.       

Concepcion, Julio et al., Complaint
Flores-Perez,Reyes Complaint
Quezada, Romy Complaint