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Leader of Massive Tax Refund Fraud Scheme Pleads Guilty in Manhattan Federal Court
A notorious tax refund fraud scheme orchestrated by Melvin Duarte has come to an end as the 37-year-old Bronx resident pleaded guilty in Manhattan federal court for his role in the scheme.
According to the indictment, Duarte, along with his co-conspirators, electronically filed thousands of fraudulent federal tax returns, seeking tens of millions of dollars in tax refunds. The scheme used stolen Social Security numbers and other identifying information from residents of Puerto Rico to file the returns.
The returns were filed using fake addresses in the Bronx, and the refund checks were then stolen by letter carriers who were recruited to participate in the scheme. The stolen checks were cashed at various banks and check-cashing businesses in the U.S. and the Dominican Republic.
The scheme resulted in over $50 million in fraudulent tax refunds, making it one of the largest known cases of its kind. Duarte’s guilty plea is a significant victory in the fight against tax refund fraud, and the U.S. Attorney’s Office has pledged to aggressively pursue those who engage in this type of scheme.
As part of the scheme, Duarte was previously convicted in 2002 for conspiracy to steal federal funds, based on substantially similar conduct. He was sentenced to three years of probation.
On January 2013, Duarte was extradited from the Dominican Republic and arrived in the U.S. He faces a maximum sentence of 10 years in prison on the charge of conspiracy to defraud the United States with respect to claims, a maximum sentence of five years in prison on the charge of conspiracy to steal mail, and a maximum sentence of five years in prison on the substantive theft of mail charge.
Mr. Bharara praised the work of the Internal Revenue Service, Criminal Investigation, the Federal Bureau of Investigation, and other agencies in bringing Duarte to justice.
DUARTE, Melvin, 37, of Bronx, New York, was charged with conspiracy to defraud the United States with respect to claims, conspiracy to steal mail, and substantive theft of mail charge. He faces a maximum of three years of supervised release and a fine of the greatest of $250,000, twice the gross pecuniary gain derived from the offense, or twice the gross pecuniary loss to persons other than the defendant resulting from the offense on each of the charges.
DUARTE is scheduled to be sentenced by Judge Chin on October 24, 2013, at 11:00 a.m.
Key Facts
- State: New York
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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