Two of his co-defendants pleaded guilty in mid-August to a scheme that defrauded the federal government and New York State of more than $1 million from fraudulent tax refunds. That has left New Rochelle resident Carlos DeLeon,44, still to stand trial on charges of conspiracy, theft of government funds, and bank bribery.
He faces a maximum sentence of 45 years in prison.
According to federal authorities, DeLeon was involved with Katherine Torres and Rosalind Smith in an operation in which he cashed fraudulently-issued tax refund checks worth more than $3 million at a J.P.Morgan Chase Bank on University Avenue in the Bronx.
Authorities say Torres and Smith conspired with DeLeon to cash the checks in exchange for thousands of dollars in bribes. Torres and Smith concealed the fact that DeLeon cashed more than 1,000 of the fraudulent checks on an almost-daily basis from 2006 through June, 2007.
Torres and Smith offered thousands in cash bribes to tellers, who followed their instructions to cash DeLeon’s checks and avoid the filing of Currency Transaction Reports.
Here’s how federal authorities say the tax-refund scam worked. The participants would unlawfully obtain personal information of Puerto Rican citizens, including their Social Security numbers. With the stolen identifications, fraudulent tax returns would be filed, claiming large refunds from NY state and the federal government. The refunds would be sent to addresses controlled by those involved in the scam, and they would be taken to the Chase branch to be cashed by those induced to do so with bribes.
The case developed from an investigation by the Internal Revenue Service, US Postal Inspection Service, the FBI, the USPIS Inspector General, and the NY State Department of Taxation and Finance.