THE TAXMAN TAKETH
Homeless Shelter Employee Allegedly Stole Residents’ Identities to Commit Tax Fraud
Marcela Heredia allegedly claimed $20,000 in tax refunds from homeless shelter residents, according to federal prosecutors.
While working at a California homeless shelter, Marcela Heredia allegedly filed tax returns for multiple residents—none of whom realized she was filing the forms on their behalf and pocketing the cash, prosecutors allege.
In addition to working as a tax examiner at the IRS office in Fresno, Heredia worked overnight shifts at the city’s Transitional Living Center for five years, beginning in 2009. Her position at the center—“youth care specialist”—gave her access to the shelter residents’ personal information, including their full names, Social Security numbers, and birthdays. Court records show she allegedly used this information to file fraudulent tax returns around the beginning of 2011. Heredia’s attorney did not respond to a request for comment.
Many TLC residents had recently aged out of the foster care system, and relied on the shelter for job training and life skills workshops. As youth care specialist, Heredia’s responsibilities included providing crisis intervention services; inspecting residents’ rooms for cleanliness, safety, and contraband; facilitating workshops on independent living skills and other topics; and generally supervising the shelter’s young adult residents.
The Daily Beast reached out to the TLC regarding Heredia’s past employment but did not receive a response by press time.
According to an open job listing on the TLC website, one of the job responsibilities is preparing and maintaining files “in a confidential manner.”
In some cases, Heredia didn’t even have to illegally obtain the residents’ information: According to court records, she allegedly offered to help multiple residents with their taxes, only to tell them they hadn’t earned enough money to file a tax return. Then, prosecutors said, she would file fraudulent tax returns on residents’ behalf and have the funds deposited into accounts she controlled, including her personal checking account.
A spokesperson for the U.S. Attorney’s Office for the Eastern District of California told The Daily Beast that none of the shelter residents interviewed by investigators were aware of the alleged fraud. “If she couldn’t talk people into letting them file their taxes for them, she could just use their information without their knowledge completely,” she said.
Heredia allegedly listed false employers and wages the residents had never earned, court records show. On one tax return, Heredia allegedly claimed a shelter resident operated a business that didn’t exist. Multiple tax returns allegedly listed certain residents as dependents of other residents—in most cases, these residents didn’t even know each other.
According to court records, Heredia filed tax returns for one resident, identified as D.G., in both 2011 and 2012.
She falsely claimed more than $20,000 in tax returns over two years, prosecutors claim.
In addition to defrauding TLC residents, Heredia allegedly filed a fraudulent tax return in her own name. She claimed a disabled niece as a dependent on her 2011 return, but the child was “not her niece, not her dependent, and was not disabled,” according to court records.
Heredia was charged with seven counts of wire fraud, aggravated identity theft, and making a false tax return on April 6. She was released from custody on April 12 pending a trial on May 15. If she is found guilty, Heredia faces a $250,000 fine for wire fraud and up to 20 years in prison.
A spokesperson for the U.S. attorney’s office said the $250,000 fine is the standard penalty in these cases.
The U.S. attorney’s office indicted another Fresno-area IRS employee for tax fraud on the same day as Heredia. Pamela Pringle, who also worked as a tax examiner at the Fresno office, was charged with allegedly fabricating deductions on four people’s tax returns, as well as her own.
“It hurts everyone who follows those rules when people submit fraudulent returns and claim taxpayer money to which they aren’t entitled,” U.S. Attorney Phillip Talbert said in a statement. “This is doubly true when IRS employees use their knowledge of the system to cheat it and enrich themselves.”
According to an IRS press release from January 2016, the agency stopped 1.4 million confirmed identity theft returns from being processed in 2015, as well as $2.9 billion worth of refunds in other types of fraud.
Last year, IRS Deputy Inspector General for Investigations Timothy Camus testified before the agency’s Ways and Means Committee that some IRS employees can pose an “insider threat” to the agency by using their positions to file fraudulent tax returns and commit identity theft (PDF). According to Camus, the IRS still does not have “adequate audit trails” that would allow them to detect an employee’s “unauthorized access to taxpayer information” and would likely be able to until 2021 at the earliest.