Guilty Plea In One Of The Largest, Longest Running Tax Fraud Schemes Ever

[kcjenkins]

Guilty.

 

That was the plea today from 29 year old Elian Matlovsky of Staten Island, New York. Matlovsky was one of 14 defendants initially charged in a scheme that authorities described as “one of the nation’s largest and longest running stolen identity tax refund fraud schemes.”  Under the scheme, Matlovsky and the other defendants are alleged to have filed more than 8,000 fraudulent U.S. income tax returns seeking more than $65 million in tax refunds. Law enforcement agencies accused the defendants of stealing personal identifying information, including Social Security numbers and dates of birth, and using that information to file false returns claiming refunds.

The Social Security numbers were largely obtained from U.S. citizens who reside in the Commonwealth of Puerto Rico. Residents of Puerto Rico are generally entitled to a Social Security number but most do not have to file federal income tax returns unless they have income from the states. Since those numbers are otherwise not being reported to the Internal Revenue Service, this means that fraudsters can file returns undetected for some time.

 

To avoid detection, the fraudsters purchased lists of addresses covered by a single mail carrier. Those addresses were used for as mailing addresses for the returns: towns targeted in the scheme included Nutley, Somerset and Newark, New Jersey, and Shirley, New York.  When the returns are processed and the checks are issued, the fraudsters work to steal the checks and convert the refunds to cash.

 

 

Matlovsky was accused of opening several bank accounts at Wells Fargo and Chase in order to deposit checks. After divvying up the proceeds with her co-conspirators, she spent some of the cash herself to support a more lavish lifestyle than her teaching salary would allow. Her purchases included tens of thousands of dollars on luxury vacations to spots like Cancun, Miami Beach and Israel, and thousands of dollars to eat out, including one meal with a $1,300 tab.

 

To combat the tax refund fraud, law enforcement agencies put together a multi-agency task force. The task force included investigators from the Internal Revenue Service – Criminal Investigations, the U.S. Postal Inspection Service, the U.S. Secret Service and the Drug Enforcement Administration (New Jersey Task Force). As a result of their efforts, an indictment was handed down against Matlovsky and two co-conspirators, Robert Diaz and Ennio Guzman.

 

Matlovsky pleaded guilty to one count of conspiracy to defraud the United States and one count of theft of government property. Her sentencing is scheduled for November 19, 2014. She faces up to five years in prison and a $250,000 fine for the conspiracy charge and up to 10 years in prison and a $250,000 fine for the theft of government property.

[TaxMan60601]

Very profitable job indeed, based on the income - job related expenses graph - "have filed more than 8,000 fraudulent U.S. income tax returns seeking more than $65 million in tax refunds" and "five years in prison and a $250,000 fine for the conspiracy charge and up to 10 years in prison and a $250,000 fine for the theft of government property" ...

[Pacun]

The longest and Elian is only 29? They should say, "the longest we have discovered". There are many places doing fraudulent returns for years and they are never caught.

 

They didn't mention the postal worker who was also in the game.

[Jack from Ohio]

Let's see...  If he only received half of what he requested, $30 Million, he receives 15 years in prison and $500,000 in penalties...

 

That would leave him with an average of $1.9Million per year for his time in prison. 

 

Who says crime doesn't pay??

[ILLMAS]

People caught with drugs get a longer sentence, maybe criminals need to change careers for less sentencing.

[Richcpaman]

People caught with drugs get a longer sentence, maybe criminals need to change careers for less sentencing.

 

They have been.  Look up "Tampa Bay Gangs giving up drug dealing for Tax Fraud"