Here’s one you don’t see every day: people joining together to defend a man who helped them steal tax refund money from the government. Oddly enough, that’s the story in today’s “Fraud of the Day” from SeattlePI.com about a man who coached people on how to steal the government’s money (a.k.a. taxpayer dollars).
The 55-year old California man helped his clients claim $763 million in fraudulent tax refunds. The article reports that “his clients paid him hundreds of thousands of dollars for training and assistance in making bogus filings with the IRS” for which he was convicted of wire fraud and conspiracy. (Wonder if there will be charges against his clients?) At one point, he pocketed around $18,000 a month by having his clients fill out bond interest forms to claim large amounts of money – a practice the article notes is “common in extremist anti-government or anti-tax groups.” He would then suggest they wire the money out of the country as soon as possible to receive it – on the theory that the Internal Revenue Service (IRS) has a harder time keeping track of funds that go out of the country. Nearly two-thirds of his clients were Canadians. (They’ve never even put any tax money into the system!)
The fraudster received several warnings from the IRS before he was arrested in November 2010. Two of his colleagues busted his cover by trying to cash $300,000 checks at a local bank.
The defendant remained defiant to the end. He “filed a series of bogus legal actions” in the case. He and his supporters also sent hundreds of letters to the court, prosecutors and IRS investigators – even after he was convicted by a jury.
He has been sentenced to 12 years in prison followed by three years of supervised release, and he must pay restitution of $6.2 million. This was his first criminal charge.
Anti-government zealotry. People rushing to the aid of a crook. Funneling taxpayer dollars out of the country. This story has a lot of moving parts. (I can’t make this stuff up.) The facts may seem a bit outlandish, but at its core, this is a case of tax refund fraud. A charismatic fraudster used a lot of people to make a lot of money. Good thing he was stopped in his tracks.