Two brothers behind one of the largest tax fraud schemes in Alaska history were ordered to pay nearly $600,000 and were given multi-year prison sentences, according to U.S. Attorney Karen Loeffler.
Abel and Joel Santana-Pierna admitted in a plea agreement, along with the help of others, to stealing the identities of more than 3,000 people in an attempt to obtain false tax returns. Not all of the fake returns were accepted, but the submitted returns totaled more than $25 million.
“It’s a big one," said Ryan Thompson, an Internal Revenue Service spokesperson. “Considering how many millions of tax returns are filed every single year, there’s going to be fraud.
“But we’re good at catching this type of behavior, so it typically it doesn’t get this big.”
Joel Santana-Pierna operated a broad ring of criminal activity centered around cocaine distribution in the Anchorage area, according to an indictment.
He admitted in a plea bargain to arranging the January 2012 import of 2 kilograms of cocaine – enough for hundreds of thousands of personal uses – so a group could distribute the drug across Alaska.
Beyond drug trafficking, Abel and Joel admitted to stealing the identities of people starting at the beginning of 2010 and lasting until they were caught in March 2012.
Their targets were residents of Puerto Rico.
Puerto Ricans, while U.S. citizens, are not required to file federal income tax returns unless they earn income away from their home island or are employed by the U.S. government.
They instead file tax returns with the Commonwealth of Puerto Rico. By using Puerto Rican identities to file false returns, the Santana-Piernas decreased the likelihood returns would be submitted by legitimate taxpayers.
Thompson said that would trigger a closer look.
“We look for patterns constantly,” Thompson said. “A lot of returns filed from the same physical address or IP address, help from local law enforcement on unrelated cases … and multiple returns from the one social security number: those are the biggest red flags.”
“This is an example of the multiple layers of criminal activity involved in a drug investigation,” said Matthew Barnes, the Drug Enforcement Administration's Special Agent in Charge.
“The extraordinary coordination between the law enforcement community has put these criminals where they belong.”
The investigation involved a laundry list of agencies, including the U.S. Attorney’s Office, the DEA, immigration officers and the U.S. Postal Inspection Service.
In the end, Joel was sentenced to 135 months in federal prison, and Abel was sentenced to 72 months. They were ordered to pay $559,755 in restitution for the tax fraud, and each agreed to forfeit roughly $130,000 obtained via drug trafficking.
Thompson said there are easy ways to avoid identity theft.
“It may sound simple, but get a locked mailbox,” he said.
In Anchorage and elsewhere, criminals will target mail to find sensitive information.
The Santana-Piernas, for example, would steal mail from mailboxes to finalize the fabricated tax returns, providing them with real addresses to which refund checks could be sent and legitimate employer identification numbers.
Thompson said people should also avoid providing their credit card number to people online and over the phone. He also encouraged people to take advantage of free annual credit checks.
Correction: a version of this story first appeared online stating Matthew Barnes was "a Drug Enforcement Administration special agent who participated in the investigation." His title has been corrected.
Channel 2's Matthew Smith contributed to this report.