Former Freeport tax preparer stole $12 million from IRS, COVID-19 relief program, prosecutors say

A former tax preparer from Freeport allegedly defrauded the federal government and one of its pandemic business loan programs of $12 million, using some of the money to buy a Caribbean house, a car and jewelry, federal prosecutors said on Wednesday.

Damaris Beltre is accused of preparing more than 800 false tax returns for individuals and companies in a 42-count indictment unsealed in federal court in Central Islip, according to the prosecutors from the Eastern District of New York.

The fraudulent returns led to $11 million in reduced tax liabilities owed to the Internal Revenue Service, the federal prosecutors said. The returns also resulted in banks making more than $1 million in Paycheck Protection Program loans based on allegedly false information about the applicant’s payroll and number of employees. The PPP was the federal government’s marquee pandemic relief initiative for businesses and nonprofits.

Beltre, 57, is among more than 30 Long Islanders who have been charged with allegedly defrauding the PPP, COVID-19 Economic Injury Disaster Loan program, Employee Retention Tax Credit program and the Sick and Family Leave Wage Credit program. Together, they are accused of stealing more than $98 million, according to a Newsday review of federal court cases in Central Islip, Brooklyn, Manhattan and White Plains.

Beltre was arrested on Wednesday at Kennedy Airport before she could board an airplane to the Dominican Republic, according to the prosecutors’ detention letter.

Beltre pleaded not guilty to charges of wire fraud, aiding and assisting in the preparation of false tax returns, money laundering and aggravated identity theft. She is in custody, according to the Eastern District of New York. Her attorney, Tracey E. Gaffey of Federal Defenders of New York, declined to comment.

Beltre’s alleged actions "cost the government millions of dollars, all while she generated a stream of illicit revenue for herself that she used to purchase, among other things, a home in the Dominican Republic," John J. Durham, U.S. attorney for the Eastern District of New York, said in a statement announcing the indictment.

The purchases were allegedly paid for with PPP funds that were supposed to help businesses survive the economic shutdown in 2020-21 that was intended to slow the coronavirus’ spread, the indictment states.

Beltre allegedly paid $22,500 for the Dominican Republic house in June 2020 using PPP proceeds that she obtained fraudulently. She also allegedly bought a Honda CRV for $16,000 in May 2021 and she and her family allegedly spent tens of thousands of dollars at jewelry stores in 2021-22, the indictment states.

Beltre owned and operated at least two businesses that allegedly secured PPP loans fraudulently, according to prosecutors: Botanica El Poder De San Miguel and L&D Tax & Multi Service Corp. She also was allegedly associated with PPP recipient Apollo Global Improvements LLC, the prosecutors said.

Beltre allegedly defrauded "the government of millions of dollars to fatten her pockets, using stolen identities, fraudulent tax submissions and bogus COVID-19 benefits claims," Harry T. Chavis Jr., special agent-in-charge of the local office of IRS Criminal Investigation, said in a statement.

Between January 2021 and April 2024, Beltre allegedly produced false income tax returns that were submitted to the IRS and resulted in fraudulent refunds. Clients paid her more than $1 million to prepare the bogus returns and a percentage of any refund they received, according to prosecutors.

By James T. Madore

james.madore@newsday.comJamesTMadore

James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.