Another Update on Tax Refund Fraud

Tax refund fraud has been a drain on our country’s resources throughout the history of our tax system. There have always been individuals, or groups of individuals working in concert, who file tax returns using false information and then pocket the fraudulent refunds these phony returns generate.

Data breaches, where identifying information about the customers of a business, for example, is stolen always seem to be in the news these days. One of the ways identity thieves use this stolen information is to file false tax returns, unbeknownst to the victims of the thefts.

Earlier this year, IRS Criminal Investigation, or “IRS CI,” the law enforcement component of the Internal Revenue Service, issued a report about its significant accomplishments and enforcement actions during its last fiscal year. According to this report, the investigation of identity theft-related tax refund fraud continues to be a priority for IRS CI. During its 2014 fiscal year, IRS CI remained committed to investigating egregious identity theft schemes through field office and multiregional task forces, including state/local and federal law enforcement agencies.

A review of filed court records in the Southern District of New York and the Eastern District of New York demonstrates the work being done to combat tax refund fraud in the New York City – metropolitan area. Many of these cases involved tax returns that were filed using stolen identities. Sentences are often a mix of prison time and restitution.

· On March 11, 2015, Napolean Alexis Sanchez was sentenced to 18 months of imprisonment for conspiracy to steal government funds and theft of government funds. The amount of restitution will be determined.

· On March 24, 2015, Ronald Espinal was sentenced to one year and one day of imprisonment for theft of government funds and ordered to pay restitution of $768,077.96 to the Internal Revenue Service.

· On April 29, 2015, German Armando Villa Perez was sentenced to 24 months of imprisonment for conspiracy to steal government funds and theft of government funds and was ordered to pay restitution of $404,907.45 to the Internal Revenue Service.

· On May 6, 2015, Jhonny Jiminez was sentenced to 48 months of imprisonment for theft of government funds and ordered to pay restitution of $1,164,126.00 to the Internal Revenue Service.

· On May 15, 2105, Messiah Clark was sentenced to 75 months of imprisonment for submitting false claims to the United States, theft of government funds and aggravated identity theft and ordered to pay restitution of $542,281.09 to the Internal Revenue Service.

· On June 2, 2015, Hilda Baide Villatoro was sentenced to 60 months of imprisonment for theft of government funds and ordered to pay restitution of $1,790,815.00 to the Internal Revenue Service.

· On June 9, 2015, Xavier Anderson was sentenced to 16 months of imprisonment for wire fraud conspiracy and ordered to pay restitution of $65,091.00 to the Internal Revenue Service.

· On June 9, 2015, Alex Antoine was sentenced to 4 years of probation for conspiracy to defraud the United States and ordered to pay restitution to $1,052,491.00 to the Internal Revenue Service.

· On June 9, 2015, Terrell Coombs was sentenced 4 years of for conspiracy to defraud the Internal Revenue Service.

· On June 23, 2015, Perez-Lara Jorkin Polanco a/k/a Abimael Cruz Santiago was sentenced to 28 months of imprisonment for theft of government funds and illegal reentry by an aggravated felon and was ordered to pay restitution of $356,241.95 to the Internal Revenue Service.

· On July 8, 2015, Anny Marie Veras was sentenced to 3 years of imprisonment for conspiracy to commit theft of government funds, theft of government funds, conspiracy to submit false claims, conspiracy to commit wire fraud and aggravated identity theft and ordered to pay restitution of $22,617,407.00 to the Internal Revenue Service.

· On July 14, 2015, Yaeli Garcia was sentenced to 2 years of probation for theft of public funds and ordered to pay restitution of $69,521.42 to the Internal Revenue Service.

· On July 23, 2015, Digna Alcantara was sentenced to 36 months and one day for theft of government property and aggravated identity theft and ordered to pay restitution of $225,628.36 to the Internal Revenue Service.

· On July 28, 2015, Luis Encarnacion was sentenced to 18 months of imprisonment for conspiracy to steal government funds, theft of government funds, conspiracy to submit false claims, aggravated identity theft and conspiracy to distribute and possess with intent to distribute cocaine and ordered to pay restitution of $112,495.60 to the Internal Revenue Service.