Yarelis Rios Gets 61 Months for Tax Refund Fraud

Yarelis Rios, a 30-year-old Lexington woman, was sentenced to 61 months in federal prison Tuesday, January 17, 2017, for orchestrating a brazen identity theft scheme that targeted the U.S. tax system. Rios stole personal identifying information from dozens of individuals and used it to file 64 fraudulent federal tax returns seeking refunds totaling $408,670. She was also ordered to pay $81,423.90 in restitution to the Internal Revenue Service.

Rios, who worked at multiple apartment complexes in the Lexington area, exploited her access to tenants’ private data. From January 2012 to April 2013, she harvested Social Security numbers and other sensitive information to fabricate tax returns under victims’ names for tax years 2011 and 2012. Most of the fraudulent returns instructed the IRS to direct deposit refunds into Rios’s personal bank accounts or onto prepaid debit cards she controlled.

U.S. District Court Judge Joseph M. Hood handed down the sentence after Rios pleaded guilty to Theft of Public Funds and Aggravated Identity Theft. Federal prosecutors proved that while the IRS blocked 51 of the 64 fraudulent filings, Rios still managed to collect $81,423.90 in stolen tax refunds before investigators caught up with her operation.

The scheme unraveled thanks to a joint investigation by the Internal Revenue Service Criminal Investigation, the U.S. Secret Service, and the Lexington Police Department. Investigators traced suspicious refund patterns and electronic filings back to Rios, whose employment history gave her repeated access to confidential resident information—access she exploited for personal gain.

Under federal sentencing guidelines, Rios must serve at least 85 percent of her 61-month prison term before release. Upon completing her sentence, she will remain under federal supervision for three years under the watch of the U.S. Probation Office.

Carlton S. Shier, IV, Acting United States Attorney for the Eastern District of Kentucky, announced the outcome alongside top federal and local law enforcement officials. Assistant U.S. Attorneys Erin M. Roth and Kathryn M. Anderson prosecuted the case, emphasizing that stealing identities to defraud the government carries steep consequences. ‘This wasn’t just tax evasion—it was a calculated theft from both citizens and the Treasury,’ Shier said. ‘Rios betrayed trust and will now pay the price.’