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Robert Diaz, 47, wore a wire for the government after Bergen County Police officers helped lead authorities to a ring responsible for filing 8,000 fraudulent U.S. income tax returns aimed at hauling in $65 million in illicit refunds.
Diaz “purportedly worked in the grocery business, resided in a house worth more than $1.6 million, and paid more than $13,000 per month in mortgage payments,” U.S. Attorney Paul J. Fishman said after his arrest four years ago.
He also “gambled more than $250,000 at casinos in New Jersey and elsewhere… purchased three Mercedes-Benz automobiles …. [and] spent thousands of dollars a night on luxury hotels,” Fishman said.
Members of the network obtained personal identifiers, such as dates of birth and Social Security numbers, of people living in Puerto Rican, a joint investigation by the IRS and U.S. Postal Inspection Service found.
(Puerto Ricans receive Social Security numbers but are required to pay federal income tax only if the income comes from U.S.-based companies or the government)
The ringleaders used various means to gain control of refund checks, sometimes bribing mail carriers to intercept checks or buying lists of the names of residents along particular mail routes, Fishman said.
“Hundreds of refund checks were mailed to just a few addresses in a few towns, including Nutley, Somerset and Newark,” he said.
The leaders then got people to open bank accounts so the checks could be taken to cashing businesses and the proceeds deposited into the dummy accounts.
Federal investigators identified a small number of IP addresses responsible for the filings. They then zeroed in on certain “hot spots” of activity and intercepted more than $22 million in fraudulently claimed refunds before they were delivered, Fishman said.
Helping crack the case was an arrest made by an officer who was with what was then the Bergen County Police Department.
BCPD Sgt. Rob Escobar was on patrol near the Palisades Park section of Overpeck County Park when he was flagged down by an elderly man who reported “two suspicious males peering into parked vehicles in the Shop-Rite parking lot,” authorities said at the time.
Escober spotted the pair sitting in a 2007 silver Chrysler 300.
Officer Salvatore LoCascio assisted Escobar after the men signed search consent forms for the sedan.
Inside, the officers found the three checks worth $24,700.
Both men were arrested and then turned over to federal agents.
Diaz, who has since moved to Miami, pleaded guilty Thursday in U.S. District Court in Newark to conspiracy to commit theft of government funds, theft of government funds and aggravated identity theft.
He admitted during the plea hearing that he “received fraudulently obtained refund checks and deposited them into banks accounts he controlled or were in the names of his associates or their companies,” Fishman said.
Hel also admitted that he and others “conspired to bribe a mail carrier to intercept refund checks before they were delivered to the people who had their identity stolen as part of the scheme,” the U.S. Attorney said.
Sentencing is scheduled for Jan. 27, 2017.
Fishman credited special agents of IRS-Criminal Investigation, the Postal Inspection Service, the Secret Service, the Drug Enforcement Administration and the U.S. Immigration and Enforcement Homeland Security agency.
Handling the case are Assistant U.S. Attorneys Mala Ahuja Harker of Fishman’s Special Prosecutions Division, and Zach Intrater, deputy chief of the Economic Crimes Unit.
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