Examples of Identity Theft Schemes - Fiscal Year 2013

The following examples of identity theft schemes are written from public record documents on file in the court records in the judicial district in which the cases were prosecuted.

Former Alabama State Employee Sentenced for Identity Theft and Tax Fraud
On December 14, 2012, in Montgomery, Ala., Natacia Webster, of Montgomery, Ala., was sentenced to 50 months in prison, three years of supervised release and ordered to pay $113,000 in restitution. Webster pleaded guilty in September 2012 to charges of conspiracy, wire fraud and aggravated identity theft. According to her plea agreement, Webster had been an employee in the central records office of an Alabama state agency, which allowed her access to the personal identifying information of numerous individuals. Webster stole identifying information from state databases and provided them to a co-conspirator, Melinda Clayton. Clayton would then use those stolen identities to file false federal tax returns that fraudulently claimed refunds.  Clayton was sentenced earlier in the year to 61 months in prison.

Florida Woman Sentenced for Tax Fraud and Identity Theft
On December 12, 2012, in Tampa, Fla., Belinda Brooks, of Tampa, was sentenced to 66 months in prison for stolen identity refund fraud. Brooks was also ordered to pay a money judgment of $118,882, the proceeds of Brooks' criminal activity. She pleaded guilty on May 25, 2012. According to court documents, Brooks stole the names and social security numbers of other individuals in order to file fraudulent tax returns in their names and obtain tax refunds for the tax years 2008 and 2009. In addition, Brooks filed a false tax return for herself.

Former Basketball Program Supervisor Sentenced for Identity Theft and Tax Evasion
On December 10, 2012, in Manhattan, N.Y., Peter Iulo, a former referee and basketball program supervisor at Chelsea Piers Management, Inc., was sentenced to 24 months in prison, three years of supervised release and ordered to pay $200,000 in restitution to the IRS. Iulo pleaded guilty in June 2012 to one count of conspiracy to defraud the United States, one count of conspiracy to commit identity theft, and four counts of tax evasion. According to court documents and statements made in court, from 1996 through 2008, Iulo worked as a referee for Chelsea Piers’ adult basketball leagues. Chelsea Piers is a sports and entertainment complex in Manhattan where various adult basketball leagues play their games. Referees for the basketball games are paid approximately $40 per game by Chelsea Piers. In any year in which a referee is paid more than $600, Chelsea Piers must report the income to the IRS. Iulo and others participated in a massive identity theft and tax evasion scheme that used stolen identification information to ensure that dozens of referees were rarely, if ever, paid more than $600 per year in their own names. As part of the scheme, Iulo provided Chelsea Piers with false IRS forms that contained the stolen identification information. When Chelsea Piers issued checks payable to the names of the stolen identities, Iulo and other referees who received these checks, endorsed, and then cashed or deposited them. Iulo used numerous identities, including New York City police officers and firefighters who had acted as referees in the past. As a result of the scheme, Iulo avoided having Chelsea Piers report the income he was paid to the IRS, and thereby avoided paying taxes on that income. In addition, Iulo facilitated identity theft and tax evasion by dozens of referees at Chelsea Piers. Iulo also failed to file federal income tax returns between 2005 and 2008.

Florida Man Sentenced for Identity Theft Tax Refund Fraud Scheme
On November 30, 2012, in Miami, Fla., William Joseph was sentenced to 24 months in prison and three years of supervised release. Joseph pleaded guilty on August 31, 2012 to one count of theft of government money and one count of aggravated identity theft. According to court documents, Joseph and seven others were charged in an FBI sting operation. From February 2012 to April 2012, the FBI operated a financial services store in North Miami that accepted fraudulently obtained tax refund checks from individuals looking to cash those checks. In March and April 2012, Joseph cashed or assisted in the cashing 13 fraudulently obtained income tax refund checks, totaling approximately $70,000. He provided fake identification documents to the undercover agent at the store matching the names of the victims on the checks. He also forged the signatures of the victims on the back of some of the checks.

Florida Man Sentenced for Tax Refund Scheme
On November 28, 2012, in Miami, Fla., Marvince Milfort, of North Miami, was sentenced to 24 months in prison and three years of supervised release. Milfort pleaded guilty to four counts of identity theft, one count of theft of public money, and one count of access device fraud. According to court documents, between September 2011 and February 2012, Milfort used stolen Social Security Administration (SSA) documents containing personal identification information of SSA applicants to electronically file false federal income tax returns in the names of the identity theft victims using an online program.  In this way, Milfort claimed IRS tax refunds to which he was not entitled. To execute the scheme, Milfort directed the IRS to deposit the refunds onto debit cards. Upon receipt of the loaded debit cards, Milfort would convert the funds to cash or would use the debit cards to make purchases at local retailers.

Mexican National Sentenced for Trafficking the Identities of Puerto Rican U.S. Citizens
On November 26, 2012, in San Juan, Puerto Rico, Jose Sergio Garcia-Ramirez, formerly of Rockford, Ill., was sentenced to 54 months in prison and ordered to forfeit $35,900. In addition, Garcia-Ramirez, a Mexican national, was ordered to be removed from the United States after the completion of his sentence. On July 17, 2012, Garcia-Ramirez pleaded guilty to one count of conspiracy to commit identification fraud and one count of aggravated identity theft for trafficking of identities of Puerto Rican U.S. citizens and corresponding identity documents. To date, a total of 53 individuals have been charged for their roles in the identity trafficking scheme, and 18 defendants have pleaded guilty. According to court documents, individuals located in the Savarona area of Caguas, Puerto Rico obtained Puerto Rican identities and corresponding identity documents. Other conspirators located in various cities throughout the United States acted as identity brokers and solicited customers and sold Social Security cards and corresponding Puerto Rico birth certificates for prices ranging from $700 to $2,500 per set. Some identity brokers assumed a Puerto Rican identity themselves and used that identity in connection with the trafficking operation. Their customers generally obtained the identity documents to assume the identity of Puerto Rican U.S. citizens and to obtain additional identification documents, such as legitimate state driver’s licenses. Some customers allegedly obtained the documents to commit financial fraud and attempted to obtain a U.S. passport.  Garcia-Ramirez admitted that he was an identity broker in the conspiracy and operated in Illinois.

Defendant Sentenced for Identity Theft Tax Refund Fraud
On November 19, 2012, in Miami, Fla., Louis Gachelin, of Miami, was sentenced to 28 months in prison and two years of supervised release. Gachelin pleaded guilty on July 13, 2012, to one count of theft of government money and one count of aggravated identity theft. According to court documents and statements made in court, in March and April 2012, Gachelin cashed and attempted to cash 29 fraudulently obtained income tax refund checks totaling approximately $100,000.  

New Mexico Man Sentenced for Stolen Identity Refund Fraud
On November 19, 2012, in Albuquerque, N.M., Douglas Kuester, a tax preparer from Silver City, N.M., was sentenced to 48 months in prison, three years of supervised release and ordered pay $911,000 in restitution. Kuester pleaded guilty in May 2012 to charges of filing false claims and aggravated identity theft. According to court documents, Kuester used stolen identities to file false tax returns which fraudulently claimed refunds.  He would direct the fraudulently obtained refunds to various bank accounts and prepaid debit cards, retaining portions of the proceeds for himself.

Barbados National Sentenced for Using Stolen Identities to File False Claims for Tax Refund
On November 7, 2012, Chicago, Ill., Andrew J. Watts, a Barbados national, was sentenced to 114 months in prison and ordered to pay $1.7 million in restitution. Watts pleaded guilty on July 10, 2012, to one count of mail fraud and one count of aggravated identity theft. According to court documents, between 2007 and 2011, Watts filed false federal income tax returns in the names of deceased taxpayers seeking fraudulent refunds. Watts either signed the name of the deceased taxpayer to the tax return or would falsely list himself as the deceased taxpayer’s representative. As part of the scheme, Watts filed over 470 false federal income tax returns, claiming fraudulent refunds in excess of $120 million. Watts directed the IRS to either mail the refund checks to an address he controlled or to electronically deposit the refund into a bank account under his control.

Arizona Woman Sentenced for Role in Tax Refund Scheme
On November 5, 2012, in Phoenix, Ariz., Gezelle Helena Amaechi was sentenced to 42 months in prison and ordered to pay $386,938 in restitution to the IRS. Amaechi pleaded guilty on August 20, 2012 to conspiracy to commit false claims, wire fraud, and aggravated identity theft. According to court documents, Amaechi and others used stolen identities of disabled individuals to claim more than $1,000,000 in bogus tax returns from the IRS. Amaechi and her associates took several sophisticated steps to conceal their misconduct, including filing the tax returns electronically using their neighbors’ unsecured wireless networks, directing the refunds to prepaid debit card accounts they had obtained under false identities, and recruiting friends and associates to receive the prepaid debit cards by mail at various addresses. Previously sentenced for their roles in the conspiracy include: Shelton Tanner was sentenced on February 6, 2012 to 60 months in prison and Latricia Williams was sentenced on September 21, 2012 to 36 months in prison.

Indiana Woman Sentenced for Filing False Claims for Refunds
On October 31, 2012, in Indianapolis, Ind., Lowkeysha Lipscomb was sentenced to 41 months in prison, three years of supervised release and ordered to pay $42,067 in restitution. According to court documents, Lipscomb filed false claims for refunds using the Social Security Numbers of other individuals both living and deceased. Lipscomb and another co-defendant would prepare fraudulent Forms W-2 and used this information to file false tax returns. The tax refunds were deposited in bank accounts and loadable debit card accounts controlled by the defendants.

Alabama Woman Sentenced for Using Stolen Identities to Obtain Tax Refunds
On October 23, 2012, in Montgomery, Ala., Jacqueline Slaton was sentenced to 70 months in prison and ordered to pay over $100,000 in restitution after pleading guilty to her involvement in a stolen identity refund fraud scheme.  According to court documents, between December 2011 and March 2012, Slaton filed at least 102 fraudulent federal income tax returns using stolen identities. She also filed 102 fraudulent Alabama state tax returns. The total federal and state tax refunds requested was $154,904. Slaton had the tax refunds directed to prepaid debit cards and had the cards mailed to various addresses on a U.S. carrier’s route. A postal employee agreed to collect the prepaid debit cards for a fee.

Ohio Woman Sentenced for Stealing Identities Used in Tax Refund Fraud Scheme
On October 23, 2012, in Cleveland, Ohio, Nelida I. Velasco, of Chardon, was sentenced to 39 months in prison and ordered to pay $47,004 in restitution. Velasco and her co-defendant David T. Tufts pleaded guilty earlier this year to charges including conspiracy to file false tax returns, making false claims, misuse of Social Security account numbers and aggravated identity theft. Tufts was sentenced in May 2012 to 48 months in prison and ordered to pay $71,355 in restitution. According to court records, from in or about March 2009 to in or about September 2010, Tufts and Velasco, along with other co-conspirators, filed at least 35 false 2008 and 2009 federal income tax returns, resulting in a total of at least $155,000 in false claims for refunds. Tufts and Velasco provided the names, Social Security Numbers, and other personal identifiers to a co-conspirator, who then used that information to create false Form W-2s and fraudulent tax returns. Many of the names, Social Security Numbers, and personal identifiers were stolen by Velasco from her then-employer, a medical billing company.

Florida Man Sentenced for Identity Theft Tax Refund Fraud
On October 16, 2012, in Miami, Fla., Kerly Joseph was sentenced to 78 months in prison and three years of supervised release on charges related to identity theft tax refund fraud. Joseph pleaded guilty on July 9, 2012, to one count of access device fraud and one count of aggravated identity theft. According to court documents and statements made in court, on April 27, 2012, Joseph’s apartment contained various items used in the identity theft fraud, including approximately 73 pre-paid debit cards in different names, a notebook containing more than 700 names, dates of birth, and social security numbers, a file folder containing tax returns for numerous individuals and a laptop computer set to an online tax preparation website. Approximately $161,000 in tax refund money had been loaded onto 22 of the pre-paid debit cards. An ATM video also showed the defendant withdrawing money from one of the pre-paid debit cards issued to a victim.

Defendant Sentenced for Role in Fraudulent Tax Refund Scheme
On October 9, 2012, in Charlotte, N.C., Arileyda Amparo, of Lincolnton, was sentenced to 37 months in prison for participating in a scheme to defraud the government by obtaining false and fraudulent income tax refunds. The criminal indictment filed in March 2011 charged seven individuals with participating in the scheme.  According to court documents and court proceedings, from January 2010 through February 2011, the defendants obtained stolen identity information, including names and social security numbers of individuals in Puerto Rico and prepared fraudulent federal tax returns using that information.  The defendants sought fraudulent refunds totaling more than $3 million during 2010 and more than $2 million from January 2011 up until their arrest in mid-February 2011. Five co-defendants previously have been sentenced in the same conspiracy:
• Dania Ramos, of Lincolnton - 48 months in prison.
• Jose de Jesus, aka Jose Ramos, of Vale - 37 months in prison.
• Xiomara Amparo, of Lincolnton - 18 months in prison.
• Mildred DePena, of Lincolnton - 12 months and one day in prison.
• Nelson Jimenez, of Lincolnton - 15 months in prison.
The last defendant named in the indictment, Johan Vargas, of Hickory, remains a fugitive from justice.

New York Man Sentenced for Role in Tax Fraud and Identity Theft Scheme
On October 2, 2012, in Hartford, Conn., Hector Medina, of the Bronx, N.Y., was sentenced to 27 months of in prison, three years of supervised release and ordered to pay $204,000 in restitution for participating in a tax fraud and identity theft scheme. On January 27, 2012, Medina pleaded guilty to one count of conspiracy to defraud the Internal Revenue Service. According to court documents and statements made in court, between October and December 2010, Medina and others obtained at least 35 U.S. Treasury income tax refund checks. The majority of these checks were obtained from filing fraudulent tax returns using the personal information of Puerto Rican citizens without their knowledge or consent.  As part of the scheme, Matilde Fabian-Pichardo used her position as a bank teller in Stamford, Connecticut, to cash the fraudulent checks by using the legitimate accounts of bank customers. This scheme resulted in a loss of approximately $185,000 to the Internal Revenue Service. In addition, members of the conspiracy cashed 19 fraudulently obtained state tax refund checks from New York and North Carolina, resulting in an additional loss of approximately $19,000.  Fabian-Pichardo also has pleaded guilty and awaits sentencing.

North Carolina Men Sentenced in Identity Theft Scheme  
On October 1, 2012, in Raleigh, N.C., Jeffrey Glenn Toohey and Christopher Fleming were sentenced to prison for their roles in an identity theft scheme. Toohey was sentenced to 125 months in prison, five years of supervised release, and ordered to pay a $600 special assessment and $261,354 in restitution. Fleming was sentenced to 30 months in prison, three years of supervised release, and ordered to pay a $300 special assessment, and $204,799 in restitution.  According to court documents, Toohey fraudulently opened credit card accounts using stolen identities. Once the fraudulent accounts were opened, Toohey and Fleming purchased items using the fraudulent accounts. Further in October 2010, Toohey and Fleming broke into a tax preparation office, stealing over 300 files containing personal information of tax clients. After the tax files were stolen, Toohey filed 2010 tax returns in the names of the clients and directed the tax refunds to either debit cards, which were mailed to addresses which Toohey and Fleming knew were vacant, or to bank accounts that were opened, using fraudulent and unauthorized information. When the tax refund proceeds were received, Toohey and Fleming used the funds to purchase various items.

Fiscal Year 2012 - Identity Theft Schemes

Table of Contents - Identity Theft Schemes

Criminal Enforcement Home Page