PITTSBURGH (AP) — Sixteen people, most from the New York City area and with ties to Nigeria, face charges in a wire fraud and identity theft ring that prosecutors said caused the Internal Revenue Service to pay more them than $10 million in fraudulent tax refunds.
The superseding grand jury indictment was returned under seal in Erie last month, but was announced late Monday by federal prosecutors in that city and Pittsburgh.
The group used stolen identity information from more than 11,000 people to open nearly 3,500 phony bank accounts involving more than 440 financial institutions in several states between December 2005 and November, authorities said. Those charged also allegedly used the stolen identities to submit tax returns claiming $38 million in refunds for tax years 2010 to 2013, more than $10 million of which was actually paid.
The alleged scheme unraveled when Widget Financial, formerly the Erie General Electric Federal Credit Union, reported some account irregularities to the FBI, according to Assistant U.S. Attorney Christian Trabold of Erie.
“Widget Financial was first to report it to FBI up here and the FBI just ran with it,” Trabold said.
The indictment indicates those charged used online tax-filing software and, whenever possible, “clean” stolen identities — those taken from people who were unlikely to file their own federal tax returns, for whatever reason. The indictment doesn’t say how the group determined whether identities were “clean.”
Those charged also used stolen ID information to obtain drivers’ licenses and Social Security cards, phone numbers and phony email addresses which they used to open the bank accounts and file the tax returns. Banks and credit unions in Pennsylvania, Colorado, Hawaii, Michigan, New Jersey, Washington state and the District of Columbia, were used, among others, the indictment said.
The fraudulent tax refunds were then deposited into phony bank accounts, spent, deposited into the conspirators’ real bank accounts or sent to Nigeria, according to the indictment.
Online court records show a grand jury in Erie first indicted four people under seal in March, including the two key defendants who face the most charges, Doherty Kushimo, 53, of Providence, Rhode Island, and Abiodun Bakre, 50, of Ozone Park, New York.
The feds have quietly worked the case since, obtaining three sealed superseding grand jury indictments, before the last one dated Jan. 13.
Authorities were rounding up the suspects Tuesday and it wasn’t immediately clear how many were in custody. Court records show Kushimo was still free when the indictment was returned but Bakre was already in a federal lockup near Youngstown, Ohio, on another unspecified charge.
Bakre’s attorney, Toni Messina, of New York City, declined comment Tuesday. Kushimo’s federal public defender did not immediately return a call for comment.
Kushimo and Bakre are charged with conspiracy to commit fraud and 12 counts each of aggravated identity theft and face up to 38 and 36 years in prison, respectively, if convicted. The others charged in the indictment all face at least one count of conspiracy to commit fraud and each faces up to 20 years if convicted.