Providence Pair Sentenced to Federal Prison in Identity Theft, $1.85 Million Fraudulent Tax Return Scheme
PROVIDENCE, RI—Richard Lara, 23, of Providence, R.I., was sentenced to 60 months in federal prison on Thursday for his role in a scheme in which personal identifying information of more than 1,200 individuals was stolen, many of which were used to file fraudulent tax returns with the IRS totaling more than $1.85 million dollars. Julian Balbi, 23, of Providence, a co-defendant in this matter, was sentenced today to 30 months in federal prison for his participation in the scheme.
Lara and Balbi were also ordered to serve three years’ supervised release upon completion of their prison terms and to pays fines of $1,000. Lara and Balbi previously pleaded guilty to four counts of aggravated identity theft and one count each of conspiracy and theft of government property.
The sentences, imposed by U.S. District Court Judge Mary M. Lisi, are announced by United States Attorney Peter F. Neronha; Colonel Steven G. O’Donnell, Superintendent of the Rhode Island State Police; William P. Offord, Special Agent in Charge of IRS Criminal Investigation; and Ted A. Arruda, Resident Agent in Charge of the Providence Office of the U.S. Secret Service.
According to court records and information presented to the court, Lara and Balbi were arrested by Rhode Island State Police on January 2, 2012, on an unrelated matter during a routine traffic stop. During a court authorized search of the vehicle which was owned by Balbi, State Police discovered 87 U.S. Treasury checks made out to third parties totaling $596,646.46. The investigation revealed that the checks were generated by the submission of fraudulent tax returns. Also seized were several ledgers and notebooks containing personal identifying information, including Social Security numbers and dates of birth, of hundreds of individuals; ledgers containing employer information such as Employee Identification Numbers and addresses; and a USB flash drive containing numerous spreadsheets detailing taxpayer information and fraudulent tax returns that had been filed with the IRS.
Rhode Island State Police executed a court authorized search of Balbi’s Providence residence where they seized numerous computers and USB flash drives. A forensic examination of the computers and flash drives revealed numerous spreadsheets containing ledgers identical to those on the flash drive seized from the vehicle. A court authorized search of Lara’s residence resulted in the seizure of an additional ledger which contained personal identity information which matched information contained on the flash drive seized from Balbi’s vehicle.
Internal Revenue Service and U.S. Secret Service agents interviewed numerous individuals listed as payees on the treasury checks seized from Balbi’s vehicle. All of the individuals stated they did not file the tax return in question and that they did not know Balbi or Lara. The IRS conducted an analysis of all of the information associated with the 1,258 individuals listed on the various ledgers and computers seized from Balbi and Lara. The investigation revealed that between April 2011 and January 2012, 823 fraudulent tax returns seeking refunds totaling $1,854,438.46 were filed with the IRS.
The case was prosecuted by Assistant U.S. Attorney John P. McAdams.