Examples of Identity Theft Investigations by IRS

By Terence P. Jeffrey | March 16, 2018 | 12:08 PM EDT

(Photo/ICE)

(CNSNews.com) - [The following was published along with the March 16, 2018 story: “IRS Documented 1.3M Identity Thefts by Illegal Aliens; Can’t Say It Referred Any for Prosecution”]

The Internal Revenue Service has posted online 369 examples of identity theft investigations conducted by IRS CI that were successfully recommended for prosecution in fiscal years 2015, 2016 and 2017. Only five of these 369 examples mention the Individual Taxpayer Identification Number and each of these five cases describes a scheme to engage in refund fraud not employment related fraud.

Here are the five examples published by the IRS:

Fiscal Year 2015

 “Former IRS Employee Sentenced for Wire Fraud and Identity Theft Scheme
“On Aug. 26, 2015, in Austin, Texas, Kenneth Goheen, a former IRS employee, was sentenced to 24 months and one day in prison and three years of supervised release. In addition, Goheen was ordered to pay $104,292 in restitution and to forfeit $15,442. Goheen, a former Tax Examining Technician, wrongfully obtained identification information from Individual Tax Identification Number (ITIN) applicants and used it to file more than 50 fraudulent tax returns between March 2013 and January 2015. Goheen collected over $120,000 in refunds based on those fraudulent tax returns.”

“Louisiana Resident Sentenced for Role in $10 Million Tax Fraud Conspiracy
“On March 11, 2015, Olsen Saravia-Hernandez, a Honduran national who most recently resided in Metairie, Louisiana, was sentenced to 43 months in prison, three years of supervised release and ordered to pay $1,000,000 in restitution to the United States. On Dec. 19, 2013, Saravia-Hernandez pleaded guilty to conspiracy to defraud the United States and aggravated identity theft. Saravia-Hernandez was part of a criminal organization led by Jacqueline J. Arias, a tax return preparer from Spruce Pine, Alabama. The organization filed false returns using Individual Taxpayer Identification Numbers (ITINs). An ITIN is a tax processing number issued by the IRS to individuals who do not have, and are not eligible to obtain, a Social Security Number. Saravia-Hernandez acted as a ‘runner’ in the organization, obtaining identification documents in Louisiana and ferrying them to Arias for use in filing false returns. In November 2014, Arias was sentenced to 97 months in prison and ordered to pay more than $10 million in restitution. To date, 17 defendants have received sentences ranging from 19 months to 42 months in prison. One defendant was arrested in Panama last year and is awaiting sentencing and four defendants remain fugitives."

“Georgia Tax Return Preparer Sentenced for Filing False Tax Returns
“On Oct. 1, 2014, in Atlanta, Georgia, Laura Romina Delgado was sentenced to 51 months in prison, three years of supervised release, and ordered to pay restitution of $2,148,440. Delgado pleaded guilty on July 7, 2014 to wire fraud. According to court documents, Delgado operated a business named Servicios Hispanos which offered various financial and legal services. Between January 2013 and May 2014, Delgado electronically filed approximately 1,300 federal income tax returns claiming fraudulent refunds. Many of the fraudulent returns filed by Delgado were in the names of individuals who were not documented to work in the United States. Delgado also submitted false and misleading forms with the returns, filed and assisted in negotiating U.S. Treasury checks and notarized and filed fraudulent ITIN applications.”

 

Fiscal Year 2016

“Five Sentenced in Connection with a Fraudulent Multi-Million Dollar Income Tax Refund Scheme
“On Aug. 12, 2016, in Austin, Texas, five individuals, including three sisters, were sentenced to prison for their roles in a scheme that involved over 3,200 fraudulent income tax returns that claimed refunds totaling more than $9 million.  
Sentenced were:
• Natividad Mercado Medina, a Mexican national, 121 months;
• Elizabeth Mercado Medina, a Mexican national, 108 months;
• Sofia Mercado Medina, a Mexican national, 108 months;
• Bertin Sanchez Garcia, a Mexican national, 33 months; and
• Yajaira Limon Lopez, a Mexican national, 51 months.
All five defendants, who have remained in federal custody since their arrests in February 2016, entered guilty pleas to one count of conspiracy to commit mail fraud earlier this year. In addition to prison, the defendants will pay, joint and severally, $3,888,519 restitution to the Internal Revenue Service and serve three years of supervised release. Sophia’s and Elizabeth’s residences in Georgia and $93,000 in U.S. currency will also be forfeited to the U.S. government. Beginning in 2014, under the direction of Natividad Medina, the defendants conspired to steal money from the U.S. Treasury by exploiting the Individual Taxpayer Identification Numbers (ITIN) system. The Medina sisters collected Mexican identification documents from unknown people in Mexico and used those to fraudulently obtain ITINs. The Medina sisters then used those ITINs to submit false and fraudulent income tax returns to the IRS Center in Austin. They requested that the IRS mail refund checks to residences or to one of more than 200 post office boxes in and around the Houston area which Lopez had rented and maintained on behalf of the Medina sisters."

 

Fiscal Year 2017

“Minnesota Couple Sentenced For Multi-Million-Dollar Income Tax Refund Fraud Scheme
"On November 17, 2016, in St. Paul, Minnesota, Mark Arlin Hammerschmidt, and his wife, Ornella Angelina Hammerschmidt, of Prior Lake, were sentenced to 135 months and 48 months in prison, respectively. In addition Mark Hammerschmidt was ordered to pay $1,832,986 in restitution and Ornella Hammerschmidt was ordered to pay $45,365 in restitution, for their roles in orchestrating a multi-million-dollar tax fraud scheme. From January 2011 through February 2013, Mark and Ornella Hammerschmidt operated an immigration and tax preparation business, called American Group, located in Shakopee, Minn. and Winter Garden, Fla., which they utilized to prepare and file more than 1,000 fraudulent federal income tax returns. The defendants attracted customers to American Group by misrepresenting their professional credentials and certifications. Most notably, Ornella Hammerschmidt falsely represented herself as a licensed immigration attorney. As part of the scheme, the defendants attempted to conceal their involvement as fraudulent return preparers by intentionally not signing the tax returns on the part of the form meant to be signed by paid preparers. The defendants also falsely reported their business addresses and bank accounts controlled by them as the addresses and bank accounts of their taxpayer clients. In connection with this part of the scheme, the defendants sought approximately $200,000 in fraudulent tax refund payments. Many of the defendants’ clients were non-or-limited English speakers, who relied on the defendants to properly and legally prepare their taxes. The false returns filed on behalf of the taxpayer clients caused substantial harm to them, both in terms of problems with the IRS and problems with immigration status. In addition, Mark Hammerschmidt obtained the personal identification information (PII) of hundreds of Guatemalan citizens and then prepared and filed with the IRS applications for Individual Taxpayer Identification Numbers (“ITINs”) in the names of the Guatemalan citizens. Once he obtained the ITINs, Mark Hammerschmidt filed multiple years’ worth of false tax returns in the Guatemalan citizens’ names, seeking refunds based on false information. Mark Hammerschmidt also used the PII to file false Minnesota state income tax returns. In connection with this part of the scheme, the defendant sought approximately $1.8 million in tax refunds based on the fraudulent tax returns he filed.”

 

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