Defendants Who Cashed More than $2.6 Million in IRS Tax Refunds Sentenced for Participating in Stolen Identity Refund Fraud Scheme

Philadelphia – United States Attorney William M. McSwain announced today that Jose Castillo, 40 formerly of Allentown, and Ivan German Sierra, 32, also formerly of Allentown, were sentenced today by Judge Edward G. Smith to 57 month and 54 month, respectively.  On January 23, 2018, Castillo pleaded guilty to conspiracy to submit false claims to the United States and to misuse of a social security number. German Sierra pleaded guilty on January 31, 2018, to conspiracy to submit false claims to the United States.  Judge Smith also ordered both defendants to pay restitution to the United States in the amount of $2,644,604.33.

Castillo and German Sierra conspired with others, including Juan Carlos Ortiz and Jessenia Cordero, to obtain lists of Puerto Rico residents’ names and social security numbers and to use the victims’ stolen identifying information to file fraudulent tax returns with the Internal Revenue Service (IRS).  The IRS sent refund checks payable to the victims, and the co-conspirators cashed checks totaling more than $2.6 million.  Ortiz was sentenced to 3 years’ imprisonment, in addition to repaying 2.5 million in restitution.  Cordero was sentenced to 3.5 years’ imprisonment and ordered to repay more than $4 million in restitution.

“Crooks never stop looking for ways to take what isn’t theirs, regardless of the consequences to their victims,” said U.S. Attorney McSwain. “Identity theft is a serious matter, and those who seek to cheat the government by filing phony tax returns and collecting refund checks using stolen identities will be prosecuted to the fullest extent of the law.”

“Jose Castillo and Ivan German-Sierra thought they had figured out a clever scheme to thwart the IRS and steal from American taxpayers,” said Guy Ficco, IRS Criminal Investigation Special Agent in Charge.  “Stealing identities and filing false tax returns is a serious crime that hurts innocent taxpayers. IRS Criminal Investigation is serious about investigating these crimes and holding accountable those who defraud the government.”

The case was investigated by the Division, Immigration and Customs Enforcement-Homeland Security Investigations, Internal Revenue Service Criminal Investigation, and the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorney David J. Ignall.