Lydia Torres Sentenced in $393K Identity Theft Tax Fraud

Lydia Torres, 45, of Worcester, is going to prison for her role in a brazen identity theft scheme that ripped off the IRS for more than $393,000. Sentenced yesterday in U.S. District Court in Worcester, Torres received one year and one day behind bars, followed by one year of supervised release. She was also ordered to pay full restitution of $393,093 to the Internal Revenue Service.

Torres pleaded guilty in August 2016 to conspiracy to file false claims and identity theft—a crime that stretched back to at least 2010. Over several years, she obtained personal identifying information, including names and Social Security numbers, of real individuals—many living in Puerto Rico. Along with stolen data, she acquired counterfeit Puerto Rican tax forms, Social Security cards, and government IDs.

Using this stolen identity cache, Torres filed dozens of fraudulent federal tax returns that falsely claimed these victims lived and worked in the U.S. mainland. She fabricated employment income, inflated dependents, and even created fake Schedule C businesses to boost refund amounts. The goal was clear: max out the payout from the IRS by any means possible.

In total, Torres submitted false returns seeking refunds of approximately $764,000. The IRS, duped by the elaborate paperwork, issued $393,093 in fraudulent payments. Torres took a cut for her role in the scam—a cut that now comes with a federal prison sentence. At least 130 innocent people had their identities weaponized in the scheme, leaving behind a trail of credit chaos and bureaucratic nightmares.

The case was prosecuted by Assistant U.S. Attorney Karin M. Bell, Chief of the Worcester Branch Office, under the authority of United States Attorney Carmen M. Ortiz. Joel P. Garland, Special Agent in Charge of the IRS Criminal Investigation unit in Boston, confirmed the details, emphasizing the ongoing crackdown on tax fraud networks exploiting vulnerable populations.

Judge Timothy S. Hillman handed down the sentence with a clear message: stealing identities to defraud the government carries real consequences. For Torres, the scheme that promised quick cash ends with a prison cell and a massive debt to repay. For the 130 victims, the fight to reclaim their financial identities is just beginning.