Tax fraud ring leader jailed for selling children’s stolen identities

Tax fraud ring leader jailed for selling children’s stolen identities

The owner of a fraudulent tax preparation business, Ariel Jimenez, was sentenced to 12 years in prison for selling the stolen identities of thousands of children on welfare and helping "customers" to falsely claim tax credits, causing tens of millions of dollars in tax loss.

His "customers" used the stolen identity info (names, dates of birth, and social security numbers) to add the children fraudulently as dependents on their tax returns so they would get a refund when they filed their taxes.

Jimenez founded the business behind this tax fraud scheme and identity theft conspiracy in 2007 in Bronx, New York.

With the help of his co-conspirators, he began selling the identities of hundreds of vulnerable minors (stolen by a New York City's Human Resources Administration fraud investigator) to thousands of people profiting from this scheme.

NYC's HRA is a government department tasked with fighting poverty by providing food and emergency rental assistance to New Yorkers in need.

"While working at the HRA, CW-1 obtained children's names and identifying information from the Welfare Management System and sold those names to [..] the defendant," according to court documents (CW-1 being a cooperating witness).

"The investigation by IRS-CI has revealed that the defendants engaged in large-scale identity theft and tax fraud schemes through which (a) identifying information of minors, including names, dates of birth, and SSNs, was obtained, including through payments to a corrupt New York City employee."

The defendant's operation charged a cash fee, on top of tax preparation charges, to" prepare and file tax returns that falsely claimed that the individual taxpayer had one or more minor dependents, to take fraudulent advantage of at least one tax credit, thereby inflating the refund paid to the taxpayer."

Stolen identities sold as "little chickens"

The defendant more than $1 million in some years by selling more than a thousand children's stolen identities he referred to as "pollitos," meaning "little chickens."

He also made hundreds of thousands of dollars by preparing fraudulent tax returns for his customers. Millions of these funds were used to buy worldwide real estate, cars, jewelry, or gambling.

"JIMENEZ's use of stolen identities harmed the actual caretakers of the children who were fraudulently claimed as dependents," DOJ said in a press release on Monday.

"In some cases, the people actually taking care of these children had much-needed tax refunds delayed and were required to prove their actual connection to their own dependent children."

12 years behind bars

Jimenez was arrested in November 2018 together with multiple co-conspirators and convicted in February of aggravated identity theft, fraud, and money laundering crimes following a two-week jury trial.

He was sentenced to 12 years in prison on Monday, ordered to forfeit several Bronx real-estate properties and $14,580,000, and ordered to pay restitution for $44,769,906.

"Ariel Jimenez's tax and identity theft crimes cruelly forced his victims to endure bureaucratic snafus and agonizing delays for their much-needed tax refunds," U.S. Attorney Damian Williams said in February.

"Today's sentence holds Jimenez accountable for brazenly selling the identities of children to his customers for his own profit," Williams added today.

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Tax fraud ring leader jailed for selling children’s stolen identities