$19 Million Stolen Identity Refund Fraud Conspiracy Charged in Alaska

A grand jury sitting in Anchorage, Ala., returned a 90-count superseding indictment yesterday against 11 defendants, the Justice Department announced. The superseding indictment included a conspiracy charge to defraud the United States involving a scheme to use stolen Puerto Rican identities to file tax returns and obtain fraudulent income tax refunds. A number of the defendants had previously been charged with conspiracy to distribute cocaine, cocaine distribution and international money laundering.

To accomplish their tax refund scheme, the indictment alleges that the conspirators fabricated individual income tax returns using stolen personal identification information from residents of the Commonwealth of Puerto Rico. The defendants obtained laptop computers that contained over 2,600 stolen identities. The laptops also identified $19 million in fraudulent refund claims. The addresses used on some of the false tax returns were obtained by stealing mail from mailboxes in and around Anchorage. In other cases, it is alleged that one or more of the defendants contacted conspirators in locations such as New Jersey and Puerto Rico and requested that fraudulently obtained tax refund checks be sent to Anchorage using false names. The indictment further alleges that the conspirators negotiated refund checks in Anchorage with the help of corrupt bank employees. In order to negotiate the tax refund checks, the defendants allegedly used false identification documents. They allegedly obtained these documents by using the names, dates of birth and Social Security numbers of other individuals in applications made to the Alaska Department of Motor Vehicles.

The indictment also charges various defendants with submitting false claims for refund, possessing stolen mail, making false claims of U.S. citizenship, committing passport fraud, making false statements to banks and credit unions, passing forged U.S. Treasury checks, aggravated identity theft and drug charges. The fraud charges each carry maximum potential penalties of between two and 30 years of imprisonment, in addition to the five year mandatory minimum prison term required upon conviction on the drug charges.

The case is being jointly prosecuted by Assistant U.S. Attorneys Thomas C. Bradley and James Barkeley of the U.S. Attorney’s Office for the District of Alaska and Trial Attorney Stephanie Carowan Courter of the Justice Department’s Tax Division. The case was investigated by the Internal Revenue Service Criminal Investigation, U.S. Immigration and Customs Enforcement, which oversees Homeland Security Investigations, the U.S. Postal Inspection Service, the U.S. State Department’s Diplomatic Security Service, and the Drug Enforcement Administration. Additional assistance was provided by the U.S. Attorney’s Offices for the District of New Jersey, the Eastern District of Pennsylvania and the Southern District of New York.

An indictment is merely a formal accusation. Defendants are presumed innocent until proven guilty in a court of law.