Leader Of Tax Fraud And Identity Theft Scheme Sentenced To 12 Years In Prison

 

Ariel Jimenez Sold the Stolen Identities of Children to Thousands of His Customers, Triggering Tens of Millions of Dollars in Fraudulent Tax Loss

 Damian Williams, the United States Attorney for the Southern District of New York, announced that ARIEL JIMENEZ, a/k/a “Melo,” was sentenced to 12 years in prison in connection with his leading role in a broad tax fraud and identity theft conspiracy and his actions to launder the proceeds of his crimes.  United States District Judge Sidney H. Stein imposed today’s sentence.

U.S. Attorney Damian Williams said: “Ariel Jimenez was the leader of a long-running fraudulent tax business that cheated the Government of tax refunds by stealing the identities of vulnerable children and using those identities to falsely claim tax credits on behalf of his clients.  Today’s sentence holds Jimenez accountable for brazenly selling the identities of children to his customers for his own profit.” 

According to the Indictment, evidence presented during trial, court documents, and statements in open court:

Beginning in or about 2007, JIMENEZ founded a tax business (the “Business”) in the Bronx, New York.  From the outset, JIMENEZ obtained stolen identities of hundreds of minors and, working with his co-conspirators, sold those identities to his customers for between $1,000 and $1,500 in cash so that customers could claim those minors as fraudulent dependents on their tax returns.  JIMENEZ personally received $1,000 in cash for every identity sold.  JIMENEZ and his co-conspirators callously referred to these stolen identities as “pollitos,” meaning “little chickens.”  In some years, JIMENEZ sold more than a thousand identities, resulting in personal profits to him of more than $1 million per year.  In addition, JIMENEZ made hundreds of thousands of dollars every year in the tax fees that the Business charged to prepare fraudulent tax returns.  In return for their participation in this scheme, the customers received thousands of dollars in inflated tax refunds.

JIMENEZ’s use of stolen identities harmed the actual caretakers of the children who were fraudulently claimed as dependents.  In some cases, the people actually taking care of these children had much-needed tax refunds delayed and were required to prove their actual connection to their own dependent children.

JIMENEZ used the profits from his tax preparation business to acquire millions of dollars of real estate in addition to funding his lavish lifestyle.  By his own admission, JIMENEZ spent more than $5.5 million of the Business’s proceeds on properties in the United States and abroad, jewelry, cars, and gambling.  In or about March 2016, JIMENEZ transferred several properties purchased with fraud proceeds to his parents for little to no value in order to conceal the criminal source of the funds used to purchase the properties. 

JIMENEZ was first arrested in November 2018 along with eight of his co-conspirators, including his sisters Evelin Jimenez and Ana Yessenia Jimenez, as well as additional co-conspirators Ireline Nunez, Leyvi Castillo, Cinthia Federo, Guillermo Arias Moncion, Marcos De Jesus Pantaleon, and Jose Castillo.  The remaining eight defendants pled guilty to fraud and other offenses.

ARIEL JIMENEZ, 38, of the Bronx, New York was previously convicted at trial of conspiracy to defraud the United States with respect to tax returns, conspiracy to commit wire fraud, aggravated identity theft, and money laundering.  In addition to his prison sentence, JIMENEZ was ordered to pay forfeiture in the amount of $14,580,000 and to forfeit three residential properties located in the Bronx.  JIMENEZ was also ordered to pay restitution in the amount of $44,769,906.

Evelin Jimenez was sentenced on August 12, 2022, to 52 months in prison; Ana Yessenia Jimenez was sentenced on August 9, 2022, to 24 months in prison; Leyvi Castillo was sentenced on October 27, 2021, to 20 months in prison; Cinthia Federo was sentenced on December 20, 2021, to time served; Guillermo Arias Moncion was sentenced on December 18, 2019, to 24 months in prison; Marcos De Jesus Pantaleon was sentenced on January 15, 2020, to 20 months in prison; and Jose Castillo was sentenced on February 20, 2020, to 24 months in prison.  Ireline Nunez has not yet been sentenced.

Mr. Williams praised the outstanding work of the IRS-Criminal Investigation.