Gang got $3.3M from fake tax-filing refunds; 32 people indicted in ID-theft racket

Thirty-two people were indicted in connection with an alleged identity theft ring run by a Long Beach gang that state prosecutors contend stole more than $3.3 million by collecting tax refunds in victims’ names, Attorney General Kamala Harris announced Monday.

The defendants — 21 men and 11 women who state prosecutors said attempted to steal another $11 million — were indicted on charges including criminal conspiracy, identity theft, grand theft and attempted theft.

“This violent street gang orchestrated a sophisticated scheme to steal the identities of hard-working Californians and defraud the government of millions of dollars in taxpayer money,” Harris said. “My office is committed to dismantling these criminal organizations and targeting their illicit income sources.”

Harris said 22 gang members were arrested. Several of the named defendants were arrested by Long Beach police Thursday and were being held on bail ranging from $140,000 to $340,000, according to the sheriff’s department website.

Eight of the defendants were arraigned Monday in a downtown courtroom and ordered by Los Angeles Superior Court Judge James Brandlin to return Monday for a pretrial hearing. Others were expected to appear in court Monday afternoon and Tuesday.

The judge said some defendants had posted bail following their arrest, despite his order to restrict the source of bail, which normally would have prompted a hearing before any release. Other defendants were still in state custody, according to Brandlin.

Although the crimes were committed as early as February 2011, it wasn’t until April 2012 that law enforcement officials using a wire tap discovered the tax fraud, according to the 170-page indictment, issued by a grand jury in San Diego and filed July 30.

“Victims either were not expecting a refund, or had no reason to suspect that they were not receiving their refund due to anything other than a glitch in the tax return system,” according to the indictment.

A Long Beach police detective discovered personal information identifying hundreds of California residents at an address associated with the gang, according to the Attorney General’s Office. Just how the gang gained access to victims’ personal information was not disclosed.

State prosecutors said defendants exchanged the stolen information via text messages with the leaders of the scheme, who then filed fraudulent tax returns. Refunds were loaded onto prepaid debit cards in the name of other victims and used to “fund the gang’s illicit activities, lavish lifestyle and to recruit members,” according to the Attorney General’s Office.

Though indictments typically remain sealed until all defendants are available for arraignment, Deputy Attorney General Tawnya Austin told the judge the matter was being discussed “in the community” and was “no longer actually secret” before agreeing to unseal the document.

Each of the defendants named in the indictment are also facing allegations of aggravated white-collar crime in excess of $500,000 and that they acted for the benefit of a criminal street gang.

“(These) arrests are a victory for law enforcement in the ongoing battle against gangs who commit financial crimes through our nation’s mail system and victimize an entire nation of law-abiding citizens,” said Robert Wemyss, inspector in charge for the U.S. Postal Inspection Service.

Tips to avoid tax-related identity theft can be found at www.oag.ca.gov.

— City News Service