New York Man Sentenced to 9 Years in Prison for Multimillion-Dollar Child Identity Theft and Tax Fraud Scheme

From the U.S. Attorney’s Office, Southern District of New York:

Preet Bharara, the United States Attorney for the Southern District of New York, announced that NOEL CUELLO, the former operator of a tax preparation business with multiple locations in the Bronx, New York, was sentenced today in Manhattan federal court to nine years in prison for leading a large-scale identity theft and tax fraud scheme through which identifying information of minors, including Social Security numbers, was obtained through corrupt payments to a former fraud investigator with the New York City Human Resources Administration.  The identifying information was then used to file thousands of fraudulent tax returns, resulting in millions of dollars in loss to the United States Treasury.  Sentence was imposed by U.S. District Judge Richard J. Sullivan.

U.S. Attorney Preet Bharara said: “Noel Cuello ran a criminal tax preparation business, raking in big fees by helping thousands of taxpayers to commit tax fraud.  Using identity information stolen from the City’s Human Resources Administration, Cuello enabled taxpayers to falsely claim dependent children, resulting in millions of dollars in lost tax revenue for the government.”

According to the Complaint, Indictment, and information presented in connection with sentencings in the case:

Under federal law, taxpayers may be entitled to claim certain tax credits, including the Earned Income Tax Credit (“EITC”), which is available to qualifying low and moderate income working individuals and families.  If the taxpayer claims the EITC based on having a child, the individual must list the name and Social Security number (“SSN”) of the child on his or her tax return, along with a separate schedule that contains the child’s name, SSN, year of birth, relationship to the taxpayer, and how many months the child lived with the taxpayer during the tax year.

Between at least approximately 2009 and spring 2014, through a tax preparation business in the Bronx, New York, with multiple locations, conspirators charged individual taxpayers a cash fee in return for which the business would prepare and file tax returns that falsely claimed that the taxpayer had one or more minor dependents, to take fraudulent advantage of the EITC. The business filed thousands of such returns, resulting in refunds totaling millions of dollars.

The business, which used several names over the years, was principally operated by NOEL CUELLO and his girlfriend, Luz C. Ricardo, with the assistance of his brother, Arismendy Cuello, and Jonathan Orbe, Catherine Ricart, and Joel Vargas, who played various roles, including bringing taxpayers to the business, preparing fraudulent returns, and receiving cash payments from clients.

To obtain SSNs and other information of minors to be used in the scheme, NOEL CUELLO repeatedly bribed Francisco Abreu, who worked at the time as a fraud investigator with the New York City Human Resources Administration.

The scheme continued even after law enforcement executed multiple search warrants of the business, with Orbe claiming to have purchased the business from NOEL CUELLO, and Ricart establishing new electronic filer accounts with the Internal Revenue Service, and opening new bank accounts, which were used to continue the scheme.

In addition to accepting cash in return for assisting other taxpayers to file fraudulent returns, Ricardo, Arismendy Cuello, Orbe, Ricart, and Vargas filed their own fraudulent returns in multiple years, falsely claiming to have one or more minor dependents.

In addition to his prison term, NOEL CUELLO, who previously pled guilty to conspiracy to commit wire fraud, was sentenced to three years of supervised release, ordered to forfeit $3.5 million, and ordered to pay $3.5 million in restitution.

NOEL CUELLO, 32, of the Bronx, New York, was indicted in April 2015, along with Ricardo, 34, Arismendy Cuello, 29, Orbe, 26, Ricart, 38, and Vargas, 29, all also of the Bronx, New York.  All of the defendants subsequently pled guilty and have been sentenced.

On January 7, 2016, Judge Sullivan sentenced Ricardo, who pled guilty to conspiracy to commit wire fraud and multiple counts of filing a false personal tax return, to 66 months in prison.

On January 14, 2016, Judge Sullivan sentenced Vargas, who pled guilty to conspiracy to commit wire fraud and multiple counts of filing a false personal tax return, to 24 months in prison.

On January 22, 2016, Judge Sullivan sentenced Arismendy Cuello, who pled guilty to conspiracy to commit wire fraud and multiple counts of filing a false personal tax return, to 36 months in prison.           

On January 28, 2016, Judge Sullivan sentenced Orbe, who pled guilty to conspiracy to commit wire fraud and multiple counts of filing a false personal tax return, to 60 months in prison.

On January 29, 2016, Judge Sullivan sentenced Ricart, who pled guilty to conspiracy to commit wire fraud and multiple counts of filing a false personal tax return, to 36 months in prison.

Abreu, 44, of the Bronx, New York, who had previously been indicted separately for unrelated robbery and firearm offenses, pled guilty in August 2015 to those unrelated offenses, along with accepting bribes, fraud, and theft counts related to his participation in the scheme.  He is scheduled to be sentenced at a future date by U.S. District Judge Naomi Reice Buchwald.

Mr. Bharara praised the outstanding work of the Internal Revenue Service-Criminal Investigation.  Mr. Bharara also thanked the New York City Department of Investigation and the Social Security Administration-Office of Inspector General for their assistance in the investigation, which he noted is ongoing.

Preet Bharara, the United States Attorney for the Southern District of New York, announced that NOEL CUELLO, the former operator of a tax preparation business with multiple locations in the Bronx, New York, was sentenced today in Manhattan federal court to nine years in prison for leading a large-scale identity theft and tax fraud scheme through which identifying information of minors, including Social Security numbers, was obtained through corrupt payments to a former fraud investigator with the New York City Human Resources Administration.  The identifying information was then used to file thousands of fraudulent tax returns, resulting in millions of dollars in loss to the United States Treasury.  Sentence was imposed by U.S. District Judge Richard J. Sullivan.

U.S. Attorney Preet Bharara said: “Noel Cuello ran a criminal tax preparation business, raking in big fees by helping thousands of taxpayers to commit tax fraud.  Using identity information stolen from the City’s Human Resources Administration, Cuello enabled taxpayers to falsely claim dependent children, resulting in millions of dollars in lost tax revenue for the government.”

According to the Complaint, Indictment, and information presented in connection with sentencings in the case:

Under federal law, taxpayers may be entitled to claim certain tax credits, including the Earned Income Tax Credit (“EITC”), which is available to qualifying low and moderate income working individuals and families.  If the taxpayer claims the EITC based on having a child, the individual must list the name and Social Security number (“SSN”) of the child on his or her tax return, along with a separate schedule that contains the child’s name, SSN, year of birth, relationship to the taxpayer, and how many months the child lived with the taxpayer during the tax year.

Between at least approximately 2009 and spring 2014, through a tax preparation business in the Bronx, New York, with multiple locations, conspirators charged individual taxpayers a cash fee in return for which the business would prepare and file tax returns that falsely claimed that the taxpayer had one or more minor dependents, to take fraudulent advantage of the EITC. The business filed thousands of such returns, resulting in refunds totaling millions of dollars.

The business, which used several names over the years, was principally operated by NOEL CUELLO and his girlfriend, Luz C. Ricardo, with the assistance of his brother, Arismendy Cuello, and Jonathan Orbe, Catherine Ricart, and Joel Vargas, who played various roles, including bringing taxpayers to the business, preparing fraudulent returns, and receiving cash payments from clients.

To obtain SSNs and other information of minors to be used in the scheme, NOEL CUELLO repeatedly bribed Francisco Abreu, who worked at the time as a fraud investigator with the New York City Human Resources Administration.

The scheme continued even after law enforcement executed multiple search warrants of the business, with Orbe claiming to have purchased the business from NOEL CUELLO, and Ricart establishing new electronic filer accounts with the Internal Revenue Service, and opening new bank accounts, which were used to continue the scheme.

In addition to accepting cash in return for assisting other taxpayers to file fraudulent returns, Ricardo, Arismendy Cuello, Orbe, Ricart, and Vargas filed their own fraudulent returns in multiple years, falsely claiming to have one or more minor dependents.

In addition to his prison term, NOEL CUELLO, who previously pled guilty to conspiracy to commit wire fraud, was sentenced to three years of supervised release, ordered to forfeit $3.5 million, and ordered to pay $3.5 million in restitution.

NOEL CUELLO, 32, of the Bronx, New York, was indicted in April 2015, along with Ricardo, 34, Arismendy Cuello, 29, Orbe, 26, Ricart, 38, and Vargas, 29, all also of the Bronx, New York.  All of the defendants subsequently pled guilty and have been sentenced.

On January 7, 2016, Judge Sullivan sentenced Ricardo, who pled guilty to conspiracy to commit wire fraud and multiple counts of filing a false personal tax return, to 66 months in prison.

On January 14, 2016, Judge Sullivan sentenced Vargas, who pled guilty to conspiracy to commit wire fraud and multiple counts of filing a false personal tax return, to 24 months in prison.

On January 22, 2016, Judge Sullivan sentenced Arismendy Cuello, who pled guilty to conspiracy to commit wire fraud and multiple counts of filing a false personal tax return, to 36 months in prison.           

On January 28, 2016, Judge Sullivan sentenced Orbe, who pled guilty to conspiracy to commit wire fraud and multiple counts of filing a false personal tax return, to 60 months in prison.

On January 29, 2016, Judge Sullivan sentenced Ricart, who pled guilty to conspiracy to commit wire fraud and multiple counts of filing a false personal tax return, to 36 months in prison.

Abreu, 44, of the Bronx, New York, who had previously been indicted separately for unrelated robbery and firearm offenses, pled guilty in August 2015 to those unrelated offenses, along with accepting bribes, fraud, and theft counts related to his participation in the scheme.  He is scheduled to be sentenced at a future date by U.S. District Judge Naomi Reice Buchwald.

Mr. Bharara praised the outstanding work of the Internal Revenue Service-Criminal Investigation.  Mr. Bharara also thanked the New York City Department of Investigation and the Social Security Administration-Office of Inspector General for their assistance in the investigation, which he noted is ongoing.