Eleven defendants have been charged in a massive scheme to file fraudulent tax returns using the stolen identities of Puerto Rican residents in an attempt to collect more than $18 million in tax refunds.
The U.S. Attorneys Office for the Southern District of New York worked with the IRS, the FBI, the U.S. Postal Service and the New York State Department of Taxation to break up the scheme. Prosecutors have filed a four-count indictment against the defendants accusing them of filing fraudulent federal and state tax returns between 2006 and 2008 using the names and Social Security numbers of residents of Puerto Rico, who normally do not file federal tax returns.
The defendants allegedly used the information to obtain Electronic Filer Identification Numbers from the IRS, and they rented residences in New York, New Jersey and Pennsylvania where they could receive the tax refund checks. They also made arrangements with various banks to receive refund anticipation loan checks payable to the Puerto Rican residents based on the expected value of the tax refunds they applied for under those identities.
Eight of the 11 defendants were arrested Tuesday morning, while two remain at large, and another was already in custody for an unrelated case.
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