A Dayton resident was one of two defendants on Monday to plead guilty in one of the nation’s "largest and longest running stolen identity refund fraud schemes ever identified," according to U.S. Attorney Paul J. Fishman.
Former U.S. Postal Service carrier and Manuel Rodriguez, 50, of New Brunswick, both pleaded guilty to charges of conspiracy to defraud the United States, theft of government property, and theft of mail by a postal employee.
Rodriguez also pleaded guilty to conspiracy to defraud the United States, theft of government property and aggravated identity theft.
Authorities said the scam caused more than 8,000 fraudulent income tax returns to be filed seeking in excess of $65 million in tax refunds, resulting in the loss of more than $12 million to the U.S. Treasury.
According to the U.S. Attorney's Office, from June 20 to Oct. 19, 2011, Haynes met several times with an undercover law enforcement agent who claimed to be engaged in a scheme to acquire income tax refund checks generated through filing phony individual income tax returns with the Internal Revenue Service.
Haynes then allegedly agreed to participate in the scheme by providing the agent with addresses located along his mail route in Somerset, according to the U.S. attorney. The addresses were to be used for filing false tax returns and then diverting the subsequent tax refund checks from the mail stream.
Rodriguez and others obtained personal identifiers, such as dates of birth and Social Security numbers, belonging to Puerto Rican citizens. Rodriguez and others used those identifiers to create fraudulent 1040 forms, which falsely reported wages purportedly earned by the “taxpayers” and taxes purportedly withheld, to create the appearance that the “taxpayers” were entitled to tax refunds.
The fraudulent 1040 forms were created and filed electronically. By tracing the specific IP addresses that submitted the electronically-filed 1040s, law enforcement officers learned that just a handful of IP addresses created many of the fraudulent 1040 forms, which, in turn, led to the issuance of Tax Refund Treasury Checks that the conspirators obtained, sold, cashed, and spent.
Authorities said Rodriguez and others gained control of the refund checks and followed the pattern of a typical Stolen Identity Refund Fraud scheme. Conspirators were able to bribe mail carriers for Tax Refund Treasury Checks, which included Haynes, who authorities said would intercept checks and deliver them to other conspirators.
The U.S. Attorney's Office said the Tax Refund checks mailed to addresses along Haynes’ mail route in Somerset were actually deposited into accounts controlled by Rodriguez and other conspirators.
During the course of the investigation, authorities found hundreds of checks that were mailed to a few different addresses in a few different towns, including Nutley, Somerset and Newark, N.J., and Shirley, N.Y.
Sentencing for both defendants is scheduled for June 5, 2013.
The conspiracy counts carry a maximum potential penalty of five years in prison and up to a $250,000 fine. The substantive counts for theft of government property carry a maximum potential penalty of 10 years in prison and up to a $250,000 fine.
Theft of mail by a postal employee carries a maximum penalty of five years in prison and up to a $250,000 fine. Aggravated identity theft is punishable by a mandatory minimum sentence of two years in prison, and must run consecutively to any other sentence.