Seven people were arrested last week in connection with a tax fraud ring partially operating in Queens who are suspected of stealing more than $500,000 from the federal government, the Queens district attorney said last week.
The group allegedly stole the identities of several people, many of whom live in Puerto Rico, and used their information to forge Social Security cards that were then used to cash U.S. Treasury income tax refund checks between Aug. 19, 2011, and Nov. 6, 2012, the DA’s office said.
“This case, unfortunately, is just a snapshot of what is alleged to be a widespread tax fraud scheme that has moved from its epicenter in the New York-New Jersey area to other parts of the country,” DA Richard Brown said.
The group faces charges of enterprise corruption, grand larceny and conspiracy, and if the defendants are convicted, they could serve five to 25 years in prison, he said.
The identities of Puerto Rico residents were allegedly stolen because they are not necessarily required to file income taxes, the DA said.
“As a result, the numbers were not likely to show up as duplicate tax returns nor would the actual Social Security holder likely report that a duplicate return had been filed,” he said.
Several of the people charged were related to each other, including Jose Mercedes, 44; his son Jose A. Mercedes, 20; and his nephew Stalin DeJesus, 30, all of whom live in the Bronx, the DA’s office said.
A spokeswoman for Brown’s office said the tax refunds were going through postal facilities in John F. Kennedy Airport, which gave the DA jurisdiction in the case.
Brown said Jose Mercedes is the alleged leader of the fraud ring and his son and nephew are alleged runners.
The other four defendants were from New Jersey and include Srinivas Bikkasani, 52; Hilda Baide Villatoro, 46; Jeronimo Baide Pinto, 44; and Satya Garaga, 35, the DA’s office said.
Bikkasani is the manager of Developers Network and Stonehouse Partners, where the checks were allegedly cashed, Brown said. Garaga was a teller at Developers Network and the DA’s office said she is suspected of knowingly cashing the checks and keeping a portion for Bikkasani.
Stonehouse Partners and Developers Network, both New Jersey check-cashing companies, were also indicted for suspected involvement in the tax fraud ring and face a fine of up to $10,000 or double the stolen amount, the DA’s office said.
According to the indictment, the alleged tax fraud ring operated in Queens and elsewhere, and the investigation involving physical surveillance, electronic eavesdropping and other techniques was a joint endeavor between the Port Authority Policy Department and the DA’s Organized Crimes and Rackets Bureau, Brown said.
Reach reporter Karen Frantz at email@example.com or by phone at 718-260-4538.
©2013 Community News Group
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