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The scheme in which David Pinski last year admitted he participated caused more than 8,000 fraudulent U.S. income tax returns to be filed, which sought more than $65 million in tax refunds — and cost Uncle Sam more than $12 million.
“No matter how sophisticated, these crimes are pure theft,” U.S. Attorney Paul J. Fishman said. “They victimize all members of the public, especially those whose identities are stolen.”
The case began on Sept. 17, 2012 when BCPD Sgt. Rob Escobar was flagged down near the Palisades Park section of Overpeck County Park by an elderly man who reported “two suspicious males peering into parked vehicles in the Shop-Rite parking lot,” County Police told CLIFFVIEW PILOT at the time.
Escober spotted the pair sitting in a silver 2007 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, the BCPD said. Federal agents took both men into custody.
Soon after, a multi-agency task force was formed, composed of investigators from the IRS, the U.S. Postal Inspection Service and the U.S. Secret Service, with assistance from the federal Drug Enforcement Administration.
An investigation found that Pinski, Michael Senatore of Moscow, Pa., and others obtained personal identifiers, such as dates of birth and Social Security numbers, belonging to Puerto Rican citizens.
They used those identifiers to create bogus 1040 forms, which falsely reported wages purportedly earned by the “taxpayers” and taxes purportedly withheld, to create the appearance that the “taxpayers” were entitled to tax refunds.
Because the returns were filed electronically, the IP addresses could be traced.
Law enforcement officers learned that just a handful of IP addresses created many of the fraudulent 1040 forms that lead to the issuance of tax refund checks.
Conspirators purchased mail routes — lists of addresses covered by mail carriers.
In applying for refunds, the crew inserted addresses along the mail route as the purported home addresses of the “taxpayers,” and obtained the refund checks sent to those addresses.
They also applied for checks using addresses otherwise controlled or accessed by certain conspirators and collected them after they were delivered to those addresses.
The ringleaders then got people to open bank accounts so the checks could be taken to cashing businesses and the proceeds deposited into the dummy accounts.
One of the defendants “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,” Fishman said.
The defendant “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,” he said.
Another defendant, a school teacher, in one year charged $123,000 on a single credit card, including tens of thousands of dollars in hotel and airfare for luxury getaways, the U.S. Attorney said.
Identifying particular “hot spots,” the task force worked with the Postal Service to intercept more than $22 million in illicit refund checks. Hundreds of them were mailed to just a few different addresses in a few different towns, including Nutley, Somerset and Newark, N.J., and Shirley, N.Y.
The sentencing judge also ordered Pinski to pay restitution of $1.38 million.
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