Date: June 26, 2024 Contact: newsroom@ci.irs.gov BOSTON — A Lawrence woman pleaded guilty yesterday in federal court in Boston to separate fraudulent schemes that targeted banks and the Small Business Administration (SBA). Luz Paulino pleaded guilty to one count of bank fraud conspiracy, one count of bank fraud, two counts of wire fraud and two counts of aggravated identity theft. United States District Judge Richard G. Stearns scheduled sentencing for Oct. 9, 2024. Paulino was initially charged by criminal complaint in December 2019 and subsequently indicted by a federal grand jury in January 2021. While on pretrial release, Paulino fled the United States and remained a fugitive for 19 months before Panamanian authorities returned her to the United States. Paulino owned and operated Agape Financial Services, a Lowell-based company that provided tax preparation and notary services. In early 2020, Paulino filed false and fraudulent federal tax returns for calendar year 2019 using the stolen identities, names and Social Security numbers of individual victims. The fraudulent tax returns reported false information regarding wages, employers and dependents, among other things, to claim tax refunds. To conceal her involvement, Paulino falsely represented to the IRS that the returns had been prepared by two former employees of Agape. Paulino then used the fraudulent returns to obtain Refund Advance Loans in the names of her victims, and then cashed the loan checks using false identification documents and forged signatures. Paulino also used stolen identities of individuals living in California, Michigan, Indiana and elsewhere to apply to the SBA for $2.1 million in COVID-19 Emergency Injury Disaster Loans (EIDL). Between June 2020 and October 2021, Paulino’s false applications listed fictitious companies that purportedly suffered lost revenues during the pandemic. She used the fraudulently obtained loan proceeds to purchase a 2020 Cadillac for $86,000 and to wire more than $395,000 to a jewelry business in the Dominican Republic, among other expenditures. The charges of bank fraud conspiracy and bank fraud each provide for a sentence of up to 30 years in prison, five years of supervised release, a fine of $1 million, restitution and forfeiture. The charges of wire fraud each provide for a sentence of up to 20 years in prison, three years of supervised release, a fine of $250,000, restitution and forfeiture. The charges of aggravated identity theft each provide for a mandatory sentence of two years in prison to be served consecutively to any other sentence imposed, up to one year of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case. Acting United States Attorney Joshua S. Levy; Harry Chavis, Jr., Special Agent in Charge of the Internal Revenue Service Criminal Investigation (IRS CI); Jodi Cohen, Special Agent in Charge, Federal Bureau of Investigation, Boston Field Division; and Melix Bonilla, Acting Chief of the Lawrence Police Department made the announcement today. Assistant U.S. Attorney Victor A. Wild of the Securities, Financial & Cyber Fraud Unit is prosecuting the case. On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.
