7 Arrested in Alleged Tax Fraud Scheme to Steal Kids' Identities

A former fraud investigator in New York has been arrested for his alleged role in — yes, you guessed it — a fraud scheme. Francisco Abreu, who was a fraud investigator for the New York City Human Resources Administration, is one of seven people who was arrested in connection to the operation, in which a tax preparation business supplied the Social Security numbers of minors to clients (for a fee) so they could claim dependent minors on their tax returns and receive associated tax credits. The fraud went on from 2009 through 2014 and cost the IRS millions of dollars of fraudulent tax returns, according to a news release from the U.S. Attorney’s Office of the Southern District of New York.

Here’s how the scheme reportedly operated, as outlined in the news release: Noel Cuello and Luz C. Ricardo operated a tax preparation business in the Bronx, and filed fraudulent tax returns for customers, with the help of Arismendy Cuello, Jonathan Orbe, Catherine Ricart and Joel Vargas. They allegedly paid Abreu for children’s information, including names, Social Security numbers and birth dates, which is used to qualify taxpayers for the Earned Income Tax Credit. The business charged customers a cash fee for the information so they could falsely claim one or many minor dependents and benefit from the tax credit. Ricardo, Arismendy Cuello, Orbe, Ricart and Vargas have been accused of filing their own fraudulent tax returns and falsely claiming minor dependents. The defendants face a slew of fraud and identity theft charges, some of which carry maximum sentences of 20 years in federal prison.

The tax fraud is bad enough, but the alleged theft of children’s identities makes this a sad crime. Losing control over your Social Security number is a guaranteed headache that will never go away — once it’s exposed, it’s only a matter of time before someone takes advantage of it, and it usually happens more than once. Children whose Social Security numbers have been compromised could face damaged credit before they’ve had a chance to establish their own, not to mention other effects of identity theft. A thief could give that Social Security number when receiving medical care or when arrested, dangerously intertwining the thief’s and victim’s records.

Children are often identity theft targets, because their Social Security numbers haven’t been tainted with bad financial decisions. Parents should watch for signs of identity theft, like a child receiving credit card offers or any financially related mail, in addition to checking their child’s credit report. Ideally, they won’t have one yet, because credit reports are only put together once someone has a relevant public record, credit account or credit application to include in it. If you’re concerned about child identity theft, each of the major credit reporting agencies has forums for helping you navigate your questions.