Manhattan U.S. Attorney Announces Charges Against Three Individuals For Participating In Large-Scale Stolen Identity Refund Fraud Tax Scheme

            Preet Bharara, the United States Attorney for the Southern District of New York, Shantelle P. Kitchen, Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation Division (“IRS-CI”), announced today the unsealing of a criminal complaint charging three defendants with participating in a large-scale tax refund scheme that used stolen identities to file fraudulent returns to obtain fraudulent tax refund checks.  TRISTON PHILLIP, GREGORY MERCADO, a/k/a “George Merchant,” and JOSUE TORRES are charged in a tax fraud scheme involving millions of dollars in claimed fraudulent returns.  PHILLIP, MERCADO, and TORRES were charged in a complaint unsealed today.  MERCADO was arrested in Rhode Island, where he appeared in federal court, and PHILLIP and TORRES were arrested in the Bronx and will appear in Manhattan federal court today.

            According to the Complaint[1]:

            From at least in or about 2011 up to and including in or about November 2015, PHILLIP, MERCADO, and TORRES conspired and engaged in a scheme to steal the names, dates of birth, and social security numbers of individuals, which the defendants then used to file fraudulent income tax returns that claimed tax refunds to which the defendants were not entitled.

            PHILLIP, 31, MERCADO, 28, and TORRES, 36, are each charged with one count of conspiracy to steal government funds, which carries a maximum sentence of five years in prison, theft of government funds, which carries a maximum sentence of 10 years in prison, and one count of aggravated identity theft in connection with the tax fraud scheme, which carries a mandatory sentence of two years in prison, to be served consecutively to any other sentence imposed.  In addition, TORRES is also charged with one count of theft and receipt of stolen mail, which carries a maximum sentence of five years in prison.  The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants would be determined by the Court.

            Mr. Bharara praised the outstanding investigative work of IRS-CI and thanked the United States Postal Inspection Service for their assistance.

            This case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorney Alex Rossmiller is in charge of the prosecutions.

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