3 Chase Bank Workers Busted in Million-Dollar Frauds: Feds

Schemes used Social Security numbers of Puerto Rican citizens

By Jon Dienst and Joe Valiquette
|  Saturday, Jan 28, 2012  |  Updated 9:18 AM EDT
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3 Chase Bank Workers Busted in Frauds: Feds

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Three employees of J.P. Morgan Chase Bank and another person have been charged with participating in two separate schemes to defraud the Internal Revenue Service and New York State of almost $5 million, federal prosecutors say.

Katherine Torres, a Chase branch manager, Rosalind Smith, a Chase employee, and Carlos Deleon are charged in one scheme that defrauded the IRS and NY State out of more than $3 million.  Judith Fulgencio, a personal banker at Chase, is charged in a separate scheme to defraud the IRS and NY State out of more than $1.8 million, prosecutors say.

Torres, Deleon and Smith were arrested today by IRS agents.  Fulgencio will surrender on Monday.  All have been charged with conspiracy, theft of government funds, and bank bribery.

Court papers filed in federal court in Manhattan describe the two similar schemes in which stolen identification information, including names, birth dates, and social security numbers, of Puerto Rican citizens were used.  The Puerto Rican identities would then be used to file fraudulent tax returns claiming large refunds.  The tax refund checks were sent to addresses controlled by the conspirators or addresses along specific mail routes assigned to US Postal Service employees who had been bribed to pull the checks from the mail.  The checks were then cashed at a Chase branch where Chase employees had been bribed to facilitate the transactions.

Torres and Smith both worked at a Chase branch on University Avenue in the Bronx.  They were paid tens of thousands of dollars in bribes to direct and pay bribes to tellers to cash the fraudulent tax refund checks and to conceal the fact that Deleon cashed tens of thousands of dollars in fraudulent tax refund checks on an almost daily basis between 2006 and 2007, prosecutors say.

Fulgencio worked at a Chase branch at Yankee Stadium.  In exchange for tens of thousands of dollars in bribes, Fulgencio directed and bribed tellers to cash fraudulent tax refund checks, prosecutors say.

IRS Special Agent in Charge Victor Lessoff said, “IRS Criminal Investigation has made investigating identity theft and refund fraud a top priority.  Filing fraudulent tax returns in the names of other individuals may result in significant harm to those individuals whose identities are stolen, as well as a monetary loss against the US Treasury.”

If convicted, Torres, Smith, and Fulgencio face up to 75 years in prison and Deleon faces up to 45 years in prison.

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