Fifty-five people have been indicted by a federal grand jury for their roles in a sprawling fraud scheme that used more than 2,000 stolen identities to file more than $20 million in phony tax refund claims, according to federal indictments unsealed Thursday, and 23 were arrested during an early-morning sweep.
Seven of eight named leaders of the ring were based in the San Fernando Valley area, allegedly directing large scams in Los Angeles and San Diego counties. The ring leaders allegedly recruited students from former Soviet-bloc countries including Kazakhstan, Russia and Turkmenistan, to carry out some of the schemes.
"This was a very sophisticated ring," said Anthony Orlando, special agent in charge of the Internal Revenue Service's criminal investigations division. "They recruited college students to do a lot of the work and were very well trained."
The group allegedly operated most of its tax fraud scams out of San Diego, where they recruited international students to establish addresses, bank accounts and other ways to receive illegal tax refunds -- some in the name of dead taxpayers.
"Most of the foot soldiers in these schemes were students on temporary visas, mostly from former Soviet Union countries, recruited by the leaders," said Anthony Orlando, special agent in charge of the Internal Revenue Service criminal investigations division.
Many of those lower-level suspects named in the indictments returned to their home country before they could be detained.
The two-year investigation uncovered four separate fraud schemes, according to the indictments. Some suspects allegedly participated in more than one scam.
The largest indictment involved 29 people, who allegedly filed false tax returns claiming fake gambling winnings and losses and phony wages and withholdings. Students were recruited in San Diego to rent apartments, obtain addresses and open bank accounts to receive $17 million in false refunds.
For their troubles, the students were given a cash payment, while the leaders took the proceeds of the scheme, investigators said.
Prosecutors called the scheme "sophisticated" because suspects used technological means to hide the location of the computers used to file the bogus tax returns; referred to each other by nicknames like "Anaconda" and "Blondie" rather than real names; and changed pre-paid cellphones regularly to avoid detection.
"Even just a few thousand dollars is a lot to a college student, so they were willing to do it," Orlando said. "Especially when they took that money back to their home country."
Arthur Grigorian, 32, and Ernest Soloian, 30, both of Glendale, are accused of masterminding the scheme along with Hovhannes Harutyunyan, 34, of Los Angeles.
The indictment also alleges Yvonne Mihailescu, 21, of Glendale, used her position as a Wells Fargo Bank employee to open bank accounts that the scheme's proceeds could be laundered through.
In another scheme, Hovakim Sogomonian, 32, of Granada Hills, and Harout Gevorgyan, 39, of Van Nuys allegedly worked with six others to target Wells Fargo bank accounts with high balances and low activity to target for illegal withdrawals.
Orlando said the suspects used voice coaches to learn to speak like the account holder and changed their appearances to look like the account holder before attempting to enter bank branches and instruct the tellers to transfer funds from the targeted accounts to gold dealers. The gold dealers then gave the defendants gold coins.
The suspects made away with more than half a million dollars this way, according to prosecutors.
A spokesman for Wells Fargo did not respond to a request for comment.
A group of three, led by Armen Eritsian, 35, of North Hollywood and Hovhannes Hartyunyan -- who was also named as a leader of the largest scheme -- claimed more than $3 million in fraudulent tax returns, prosecutors said.
Between the two scams targeted at the IRS, the agency paid out $7 million -- including payments to dead people.
A fourth indictment names 18 defendants, led by Karen Galstian, 35, of Sherman Oaks, and Vahag Stepanyan, 32, who allegedly used stolen identities in a plan to defraud Bank of America of more than $600,000 by writing bad checks.
"This case is staggering in terms of the number of victims, its level of sophistication, its audacious methods and the callous disregard for victims," said U.S. Attorney Laura Duffy in a statement.
Investigators are still looking for some of the suspects who have not yet been apprehended and are working to extradite 21 who have left the country. The involved students came from Kazakhstan, Russia and Turkmenistan.
The suspects face charges including conspiracy, mail fraud, wire fraud, money laundering, aggravated identity theft, conspiracy to commit bank fraud and criminal forfeiture. ___
(c)2013 the Daily News (Los Angeles)
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Distributed by MCT Information Services
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