A former New York tax preparer was sentenced to nine years in prison for filing thousands of fraudulent tax returns using the stolen identities of minors.
Noel Cuello, 32, the former operator of a tax preparation business with multiple names and locations in the Bronx, N.Y., was sentenced Monday in Manhattan federal court for leading a large-scale identity theft and tax fraud scheme through which identifying information of minors, including Social Security numbers, was obtained through corrupt payments to a former fraud investigator with the New York City Human Resources Administration. The Human Resources Administration is the largest social services agency in the country and administers 12 major public assistance programs.
The identifying information was then used to file thousands of fraudulent tax returns, resulting in millions of dollars in loss to the U.S. Treasury. U.S. District Judge Richard J. Sullivan imposed the nine-year sentence.
“Noel Cuello ran a criminal tax preparation business, raking in big fees by helping thousands of taxpayers to commit tax fraud,” said U.S. Attorney for the Southern District of New York Preet Bharara in a statement. “Using identity information stolen from the city’s Human Resources Administration, Cuello enabled taxpayers to falsely claim dependent children, resulting in millions of dollars in lost tax revenue for the government.”
According to prosecutors, between at least approximately 2009 and spring 2014, Cuello and his associates charged taxpayers for preparing and filing tax returns falsely claiming they had one or more minor dependents, to take fraudulent advantage of the Earned Income Tax Credit. The business filed thousands of such returns, resulting in refunds totaling millions of dollars. To obtain Social Security Numbers and other information of minors to be used in the scheme, Cuello repeatedly bribed Francisco Abreu, who worked at the time as a fraud investigator with the New York City Human Resources Administration.
The business, which used several names over the years, was principally operated by Cuello and his girlfriend, Luz C. Ricardo, with the assistance of his brother, Arismendy Cuello, and Jonathan Orbe, Catherine Ricart, and Joel Vargas, who played various roles, including bringing taxpayers to the business, preparing fraudulent returns, and receiving cash payments from clients.
The scheme continued even after law enforcement executed multiple search warrants of the business, with Orbe claiming to have purchased the business from Noel Cuello, and Ricart establishing new electronic filer accounts with the Internal Revenue Service, and opening new bank accounts.
In addition to accepting cash in return for assisting other taxpayers to file fraudulent returns, Ricardo, Arismendy Cuello, Orbe, Ricart, and Vargas filed their own fraudulent returns in multiple years, falsely claiming to have one or more minor dependents.
Noel Cuello, who previously pled guilty to conspiracy to commit wire fraud, was sentenced to three years of supervised release in addition to his nine-year prison term. He was also ordered to forfeit $3.5 million, and ordered to pay $3.5 million in restitution.
Cuello, 32, was indicted last April, along with Ricardo, 34, Arismendy Cuello, 29, Orbe, 26, Ricart, 38, and Vargas, 29, all from the Bronx. They all subsequently pled guilty and were sentenced last month by Judge Sullivan. Ricardo was sentenced to 66 months in prison, Vargas to 24 months in prison, Arismendy Cuello to 36 months in prison, Orbe to 60 months in prison, and Ricart to 36 months in prison.
Abreu, 44, who had previously been indicted separately for unrelated robbery and firearm offenses, pled guilty in August 2015 to those unrelated offenses, along with accepting bribes, fraud, and theft counts related to his participation in the scheme. He is scheduled to be sentenced at a future date by U.S. District Judge Naomi Reice Buchwald.