SCRANTON – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a federal grand jury indicted Julio Polanco Suarez, age 41, of Allentown, Pennsylvania, with conspiring to defraud the government, theft of government money, and aggravated identity theft.  The indictment was returned on April 10, 2018, but remained under seal until Suarez’s apprehension.

According to United States Attorney David J. Freed, the indictment charges Suarez with conspiring to defraud the government between March 1, 2009 and September 20, 2016.  The government money and identity theft charges are alleged to have occurred in Luzerne County, Pennsylvania, on September 20, 2016.

The indictment alleges that Suarez’s coconspirators stole individuals’ identities, used them to prepare and file false tax returns, and obtained the refund checks issued by the U.S. Treasury pursuant to those false tax returns.  Suarez took possession of the refund checks, forged names and social security numbers on them, and cashed them at check cashing businesses in the Middle District of Pennsylvania.  Suarez and his coconspirators are charged with cashing $522,613.80 in fraudulently obtained Treasury checks, and attempting to cash an additional $41,401.57 worth of checks.

The case was investigated by the Department of the Treasury’s Office of the Inspector General, the Internal Revenue Service Criminal Investigation, and other federal and state law enforcement agencies.  Assistant United States Attorney Phillip J. Caraballo is prosecuting the case.

Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.

A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.

The maximum penalties under federal law for the most serious charges are up to 10 years of imprisonment.  The aggravated identity theft charge carries a two-year consecutive mandatory minimum term of imprisonment.  Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.

 

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HARRISBURG - With the deadline for filing income tax returns rapidly approaching, the U.S. Attorney’s Office for the Middle District of Pennsylvania, and the Philadelphia Field Office, IRS Criminal Investigation Division, jointly announced a warning to those who are thinking about breaking the law by committing tax crimes including listing recent tax fraud prosecutions and sentences.

“Individuals who fail to file tax returns in a timely manner are taking advantage of the honest taxpayers who finance the government’s operations, and subject themselves to criminal prosecution,” said U.S. Attorney David J. Freed.  “We will continue to pursue those who fail to meet the obligations of paying their fair share.”

"As we approach the end of filing season, taxpayers are reminded that preparing and filing false tax returns will result in extremely negative consequences,” said Guy Ficco, Special Agent in Charge of the Philadelphia Field Office. “Whether you prepare your own tax return or utilize the services of a tax return preparer, remember, you the taxpayer are ultimately responsible for the accuracy of your tax return.”

Over the last year, the U.S. Attorney’s Office has prosecuted and convicted numerous individuals for filing false federal tax returns and committing tax evasion. Defendants have received substantial sentences for tax fraud, ranging from several years in prison to home confinement. Restitution is mandatory and often includes substantial interest and penalties.  For example, the following individuals were charged and/or sentenced for tax fraud recently:

FILING FALSE TAX RETURNS AND TAX EVASION

Jeremy Baney, age 48, an inmate at SCI Smithfield, Huntingdon, Pennsylvania, pleaded guilty on May 2, 2018, to aiding and assisting in making false statements to the IRS.  Baney admitted to being involved in a prison tax scheme from November 17, 2009 through February 25, 2012.  Baney obtained names and social security numbers of inmates to file false tax returns or would send that information to a former inmate who would then prepare and file the fraudulent 1040EZ tax returns with fictitious wages and holdings in order to get a tax refund.  The government is alleging that Baney attempted to receive tax refunds totaling $236,407, to which he was not entitled to receive.  Baney is awaiting sentencing.

Atef Hussein, age 48, of Hagerstown, Maryland, former owner/operator of the Fairground Diner in Carlisle, Pennsylvania, was sentenced on May 30, 2018, to one year and one day imprisonment and ordered to pay restitution in the amount of $139,293, for income tax evasion.  Hussein understated income and taxes due, resulting in false income tax returns for tax years 2011 through 2015, causing a tax loss of approximately $139,293.

Hiteshkumar Patel, age 52, of South Abington Township, Pennsylvania, was sentenced on August 9, 2018, to serve 234 months’ imprisonment and ordered to pay restitution in the amount of $896,112, for conspiracy to commit wire and mail fraud, as well as aggravated identity theft in November 2017.  The investigation revealed that beginning in or about August 2015 through May 2016, Patel was involved in a multi-faceted international conspiracy and devised a scheme to defraud that included individuals who falsely represented themselves as Internal Revenue Service (IRS) agents, as well as individuals associated with an illegitimate online loan business. Individuals who falsely claimed to represent the Internal Revenue Service (IRS) contacted unsuspecting victims throughout the United States.  The victims were told that they had to immediately make a monetary payment in order to satisfy outstanding IRS tax debt and/or IRS penalty fees.  Victims were told that there would be severe consequences if they did not immediately comply, such as federal agents knocking on their door, notification to employers, garnishment of wages, and even arrest. Victims of the online loan fraud scheme were instructed that in order to receive the proceeds of their online loan application, they had to first make monetary payments associated with the processing of the application, such as fees for expediting the loan and insurance.   Some victims of the loan fraud scheme were also told that outstanding IRS debt had to be satisfied before their loan application could be processed. All of the victims were instructed to remit monetary payments to a number of different individuals via the U.S. Mail, Western Union, MoneyGram, and/or RIA (Walmart to Walmart).  The monetary payments were received by Patel, or by members of the unlawful telemarketing organization and unindicted co-conspirators.  The investigation identified 634 individuals directly tied to Patel’s criminal conduct from across the country.  The victims collectively sustained a loss of nearly $900,000.

Diane M. Fabian, age 67, of Middletown, Pennsylvania, pleaded guilty to tax evasion charges on August 14, 2018.  Fabian admitted that from 2011 through 2015, she filed tax returns that understated her income resulting in a total tax due and owing to the United States of $45,100. Fabian is awaiting sentencing.

James W. Pilsner, age 60, of Harrisburg, Pennsylvania, the former Vice President of Rite Aid, pleaded guilty on October 1, 2018, to vendor kick-back and tax evasion charges. In March 2014, Pilsner filed an income tax return with the IRS that did not report his receipt of $411,500 in kick-back money during 2013, thereby avoiding approximately $157,648, in federal income taxes.  Pilsner paid $300,000 towards his tax restitution obligation for the period 2013-2017 of approximately $592,000, and agreed to pay the balance at sentencing.

Al T. Hughes, age 60, of Scranton, Pennsylvania, was charged in a superseding indictment on January 30, 2018, and pleaded guilty on February 7, 2019, to tax evasion. Hughes admitted to diverting approximately $892,000 in corporate receipts to his personal benefit, and failed to report the diverted receipts as income on his federal tax returns.  The resulting tax loss to the United States is approximately $231,000.  Hughes also admitted that he began diverting corporate receipts in 2009 and continued through 2014, and that he cashed hundreds of customer checks, intended for payment of funeral home services, at various financial institutions, including a check cashing service in Scranton.  Hughes diverted corporate receipts from four area funeral homes, including the Thomas J. Hughes Funeral Home, the Eagan-Hughes Funeral Home, the McGoff-Hughes Funeral Home, and the Davies & Jones Funeral Chapel. Sentencing is currently scheduled for June 7, 2019.

James Famularo, age 61, of Swiftwater, Pennsylvania, Famularo was sentenced on April 2, 2019, to six months’ imprisonment to be followed by six months home detention and ordered to pay restitution to the IRS of $196,119, for income tax evasion spanning tax years 2012 through 2015.  Famularo failed to report a total of $646,663.40 in income between tax years 2012 and 2015, and filed false Form 1040 Individual Income Tax Returns for each of tax years 2012, 2013, 2014 and 2015 resulting in a loss of $196,119 to the IRS. 

STOLEN IDENTITY REFUND FRAUD

In addition to prosecuting tax evaders and fraudulent tax return preparers, the IRS and the U.S. Attorney’s Office are continuing to investigate and prosecute individuals who steal the identities of taxpayers and file fraudulent tax returns.

Julio Polanco Suarez, age 41, of Allentown, Pennsylvania, was charged on April 10, 2018, with conspiring to defraud the government between March 1, 2009 – September 20, 2016; theft of government money; and aggravated identity theft on September 20, 2016, in Luzerne County.  The indictment alleged that Suarez’s coconspirators stole individuals’ identities, used them to prepare and file false tax returns, and obtained the refund checks issued by the U.S. Treasury pursuant to those false tax returns.  Suarez took possession of the refund checks, forged names and social security numbers on them, and cashed them at check cashing businesses in the Middle District of Pennsylvania.  Suarez and his coconspirators are charged with cashing $522,613.80 in fraudulently obtained Treasury checks, and attempting to cash an additional $41,401.57 worth of checks. Suarez has signed a plea agreement and is awaiting his plea hearing.

Federal penalties for each count of conviction of tax crimes range from a maximum of one year in prison and a $100,000 fine for failure to file a tax return, false withholding exemptions, and delivering or disclosing false tax documents, to a maximum of 10 years in prison and a $250,000 fine for conspiracy to defraud with respect to false refund claims. Other penalties include a mandatory term of two years in prison and a $250,000 fine for aggravated identity theft charges, three years in prison and a $250,000 fine for obstructing or impeding an investigation and filing or preparing a false tax return, and a maximum of five years in prison and a $250,000 fine for tax evasion, failure to pay taxes, conspiracy to commit a tax offense or conspiracy to defraud.

TAX SCAM WARNING

The U.S. Attorney’s Office and the IRS remind tax payers to exercise caution during tax season to protect themselves against tax schemes ranging from identity theft to return preparer fraud. Illegal scams can lead to significant penalties and interest and possible criminal prosecution. IRS Criminal Investigation works closely with the Department of Justice to shutdown scams and to prosecute the criminals behind them.  The IRS would like to warn taxpayers of a quickly growing scam involving a phone scam whereby criminals fake calls from the Taxpayer Advocate Service (TAS), an independent organization within the IRS.

Similar to other IRS impersonation scams, thieves make unsolicited phone calls to their intended victims fraudulently claiming to be from the IRS. In this most recent scam variation, callers “spoof” the telephone number of the IRS Taxpayer Advocate Service office in Houston or Brooklyn. Calls may be ‘robo-calls’ that request a call back. Once the taxpayer returns the call, the con artist requests personal information, including Social Security number or individual taxpayer identification number (ITIN).

TAS can help protect your taxpayer rights. TAS can help if you need assistance resolving an IRS problem, if your problem is causing financial difficulty, or if you believe an IRS system or procedure isn’t working as it should. TAS does not initiate calls to taxpayers “out of the blue.” Typically, a taxpayer would contact TAS for help first, and only then would TAS reach out to the taxpayer.

In other variations of the IRS impersonation phone scam, fraudsters demand immediate payment of taxes by a prepaid debit card or wire transfer. The callers are often hostile and abusive. Alternately, scammers may tell would-be victims that they are entitled to a large refund but must first provide personal information. Other characteristics of these scams include:

Scammers use fake names and IRS badge numbers to identify themselves.

Scammers may know the last four digits of the taxpayer’s Social Security number.

Scammers spoof caller ID to make the phone number appear as if the IRS or another local law enforcement agency is calling.

Scammers may send bogus IRS emails to victims to support their bogus calls.

Victims hear background noise of other calls to mimic a call site.

After threatening victims with jail time or with, driver’s license or other professional license revocation, scammers hang up. Others soon call back pretending to be from local law enforcement agencies or the Department of Motor Vehicles, and caller ID again supports their claim.

Here are some things the scammers often do, but the IRS will not do. Taxpayers should remember that any one of these is a tell-tale sign of a scam.

The IRS will never: 

Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail a bill to any taxpayer who owes taxes.

Threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested for not paying.

Demand that taxes be paid without giving taxpayers the opportunity to question or appeal the amount owed.

Ask for credit or debit card numbers over the phone.

Call about an unexpected refund.

For taxpayers who don’t owe taxes or don’t think they do: 

Please report IRS or Treasury-related fraudulent calls to phishing@irs.gov (Subject: IRS Phone Scam).

Do not give out any information. Hang up immediately. The longer the con artist is engaged; the more opportunity he/she believes exists, potentially prompting more calls.

Contact TIGTA to report the call. Use their IRS Impersonation Scam Reporting web page. Alternatively, call 800-366-4484.

Report it to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add "IRS Telephone Scam" in the notes.

For those who owe taxes or think they do: 

Call the IRS at 800-829-1040. IRS workers can help.

View tax account online. Taxpayers can see their past 24 months of payment history, payoff amount and balance of each tax year owed. 

Stay alert to scams that use the IRS or other legitimate companies and agencies as a lure. Tax scams can happen any time of year, not just at tax time. For more information visit Tax Scams and Consumer Alerts on IRS.gov. 

 

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