Woman Sentenced to 54 Months for IRS, Bank Fraud, and COVID-19 Loan Scheme

Luz Paulino, 42, was sentenced to 54 months in prison for defrauding the IRS, SBA, and a bank using stolen identities.Photo byCarles RabadaonUnsplash

Luz Paulino, 42, of Lawrence, was sentenced to 54 months in federal prison for using stolen identities to defraud the IRS, a bank, and the SBA, according to the U.S. Attorney's Office, District of Massachusetts.

U.S. District Court Judge Richard G. Stearns also ordered Paulino to serve four years of supervised release and pay restitution of $37,056 to MetaBank and $456,300 to the SBA.

Paulino pleaded guilty in June 2024 to charges of bank fraud conspiracy, bank fraud, wire fraud, and aggravated identity theft.

According to the U.S. Attorney's Office, Paulino was initially arrested in December 2020 and indicted in January 2021. While on pretrial release, she fled the country and remained a fugitive for 19 months before Panamanian authorities returned her to the U.S.

Paulino operated Agape Financial Services, a Lowell-based tax preparation and notary business. Between 2019 and early 2020, Paulino filed fraudulent tax returns using stolen identities, falsely claiming tax refunds, according to the U.S. Attorney’s Office.

She then used these returns to secure Refund Advance Loans from a bank, cashing the checks using fake IDs and forged signatures.

In a separate scheme, Paulino used stolen identities of businesspeople from various states to apply for $2.1 million in COVID-19 Emergency Injury Disaster Loans.

According to the U.S. Attorney’s Office, from June 2020 to October 2021, she falsely claimed revenue losses for fictitious businesses, using the funds for personal expenses, including wiring $395,000 to the Dominican Republic and purchasing an $86,000 Cadillac.

Paulino remains under court supervision and will voluntarily report to a federal prison to begin her sentence, the department says.