Massive ID Theft/Fraud Scheme Busted

A four-count indictment charging eleven defendants for their roles in a massive scheme to steal identities of residents of the Commonwealth of Puerto Rico and file fraudulent federal and state tax returns in the names of those people seeking millions of dollars of tax refunds was unsealed in a Manhattan federal court.

According to a statement released today:

From approximately 2006 through 2008, the defendants engaged in a scheme to file false and fraudulent federal and state tax returns seeking tax refunds, using identification information of residents of Puerto Rico. Residents of the Commonwealth of Puerto Rico typically do not file tax returns with the IRS because such filing is not required as long as all of the Puerto Rico resident’s income is derived from sources in Puerto Rico. By using Social Security numbers assigned to residents of Puerto Rico, participants in the scheme, among other things, minimized the risk that a legitimate federal tax return will already have been filed by the person whose identity has been stolen. Over the course of the scheme, more than $18 million in fraudulent federal and state tax refunds were sought from the IRS, NYSDTF, and other state tax authorities.

The press release does not indicate how the defendants allegedly obtained the Puerto Ricans’ identity information — whether it was by theft or if they induced them to sell them the information, etc.

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