By The Star Staff
An investigation by the island Justice and Treasury departments has exposed and brought an end to an illegal scheme that involved the filing of more than 700 fraudulent income tax returns and caused the loss of $7 million in public funds.
After completing the investigative process, as part of an alliance between both agencies to combat fraud and tax evasion, the Justice Department’s Economic Crimes Division filed 202 charges against the accused perpetrator of the scheme, identified as Annette Castro Méndez, who worked as an accountant and payroll specialist registered with the Treasury Department.
As revealed by the investigation, in 2022, Castro Méndez offered to fill out income tax forms for her clients, guaranteeing the return of money in the form of refunds. For this, the payroll specialist substantially increased medical expenses and donations by including false information about health institutions and nonprofit organizations.
The investigation also revealed that Castro Méndez generated more than $265,000 in taxable income from accounting services, which she failed to report on her income tax returns from 2019 to 2022.
The defendant faces 110 counts of violating the Internal Revenue Code by filing fraudulent returns, 88 counts of aggravated illegal appropriation, three counts of fraud and one count of ideological falsehood.
“Tax fraud is a serious crime that impacts all citizens and affects the quality of life of vulnerable populations on the island, as they depend on government programs to obtain essential services,” Justice Secretary Domingo Emanuelli Hernández said. “For this reason, the Department of Justice processes these crimes as a priority. Through our alliance with the Department of the Treasury, the Economic Crimes Division prosecutors, led by María Teresa Carro Lahongrais, investigate and present cases of tax fraud before the courts with the rigor and expertise they deserve. This scheme caused a million-dollar loss of public funds that belong to the Puerto Rican people, for which the accused will face serious consequences.”
Treasury Secretary Nelson Pérez Méndez said “this referral by the Treasury Department, which today culminates with the filing of charges, is the product of the inspection efforts carried out by the Department of the Treasury during and after processing forms.”
“The defendant failed in her duties and responsibilities as a payroll specialist by declaring false and fraudulent information in the boxes for donations to nonprofit organizations that, according to the investigation, were not made, and medical expenses that the taxpayers did not incur, altering the tax liability of her clients,” he said. “Additionally, she omitted income from her income tax return. These acts are totally reprehensible and not only defraud the state, but all Puerto Ricans. At the Department, we will continue to monitor and pay attention to any action that seeks to defraud the tax system and goes against the best interests of the state and all taxpayers. This is another step in the right direction to detect and stop tax non-compliance.”
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