Albany, NY (September 17, 2012) -
The New York State Departments of Labor and Taxation and Finance, and Westchester County District Attorney Janet DiFiore today announced the arrest of Chiara Hudson, 24, of Mount Vernon, NY. Detectives from the Westchester County District Attorney's Office arrested Ms. Hudson following a joint Department of Labor and Tax Department investigation.
Ms. Hudson was charged with stealing $12,150 in unemployment insurance benefits and $5,600 in tax returns using stolen identities. She also admitted to filing more than 100 false New York State tax returns, resulting in unwarranted refund checks totaling $100,000 to be issued between 2010 and 2011.
Governor Andrew M. Cuomo said, "Tax paying New Yorkers are the real victims of scammers who take advantage of the unemployment insurance and tax systems and it will not be tolerated. We will continue to put our efforts into preventing and aggressively investigating instances of fraud."
Ms. Hudson, of 70 Elm Avenue, a tax preparer and owner of Arlanna's Accounting Services, prepared tax returns out of her home and an office in the Bronx. In November of 2011, Department of Labor investigators found that the defendant used 16 different identities to attempt to collect benefits. Ms. Hudson also submitted a fraudulent claim under her own name, falsely claiming to have worked for a healthcare company in Westchester County.
The Department of Taxation and Finance joined the investigation and discovered that Ms. Hudson, in addition to filing the 100 false returns, also stole the identities of four taxpayers. She used those identities to submit false 2009 tax returns in their names, resulting in fraudulent refunds of more than $5,600.
Ms. Hudson has been charged with two counts of Grand Larceny in the Third Degree, one count of Attempted Grand Larceny in the Third Degree, Grand Larceny in the Fourth Degree, Criminal Tax Fraud in the Fourth Degree and two counts of Offering a False Instrument in the First Degree. She faces up to seven years in state prison if convicted.
Employers across the state contribute to New York's Unemployment Insurance Trust Fund. When the Fund is forced to pay out because of a fraudulent claim, employers have to pay more -- and that means consumers will be paying more as well.
Working with Hudson Valley employers, the Department of Labor has referred 115 individuals to local prosecutors for stealing more than $1,044,500 in unemployment insurance benefits. From June 2011 to June 2012, 94 of those charged have been arrested and over $345,849 has been restored to the Unemployment Insurance Trust Fund.
"Employers have a vital role in combating unemployment insurance fraud. Employers should carefully examine notices of benefit payments from the Department of Labor to help us identify fraudulent activity," said New York State Labor Commissioner Peter M. Rivera. "Alerting the Department of Labor about an employee fraudulently collecting benefits saves taxes for employers and the general public alike."
"While the majority of tax return preparers operate ethically and professionally, when we uncover an unscrupulous practitioner, we take the offense and our investigation very seriously," said Commissioner of Taxation and Finance Thomas H. Mattox. "This preparer not only knowingly filed false returns on behalf of her clients, but also stole the identities of multiple individuals for her own gain"
The Department of Labor's Office of Special Investigations partners with employers to aggressively investigate and root out unemployment insurance fraud within their businesses. The Office of Special Investigations builds cases and refers them to local district attorneys to prosecute. During the last three years, the Department of Labor has uncovered more than $150,480,451 in fraudulent unemployment insurance payments statewide and referred more than 2,600 cases to district attorneys and law enforcement agencies, including 750 last year alone.
Anyone with information about unemployment insurance fraud should call the Department of Labor's toll-free fraud hotline at (888) 598-2077. Tax fraud can be reported to the Department of Tax and Finance online at www.tax.ny.gov/reporttaxfraud.htm