Tax Fraud

Overview:

fotd-blog-225x175-tax-refund-fraudTax refund fraud occurs when a criminal steals a person’s Social Security number, name and birth date along with false income and tax-withholdings to file a false tax refund.  The return is often placed on a debit card and sent to a specific address.

How is Fraud Perpetrated by the Humbug Gang

Nearly three years ago, the Humbug Gang was successful in stealing more than $50 million from the state capital, Dolus, by committing tax refund fraud.  To do this, the inmates teamed up with those on the outside to steal the identities and money of others by using their Social Security numbers (SSN) to file fraudulent returns.  Those in jail were responsible for threatening other inmates for their SSN information and passing it on to those on the outside to file the returns.  But the group took it a little further – those on the outside even began seeking out and stealing SSN information of regular citizens, changing the address, and receiving millions in fraudulent returns.

How is fraud perpetuated by the Deceit Family

Working as a tax professional, Chuck is always successful in gaining a “little” extra cash around tax season every year.  Every year he files thousands of fraudulent federal income tax returns using the identities of clients and community members who have recently deceased within the past year.  He has the money wired to a separate bank account and often pulls in millions once the returns go through.

How the government can prevent it

To stop these fraudsters in their tracks, and prevent more identities from being stolen, Dolus has set forth plans to utilize a comprehensive public records database to determine the credibility of an individual’s identity during the tax refund process.  By using a third-party public records database and an identity-based analytics solution, the government will more easily and quickly be able to verify and authenticate the identity of the individual requesting the tax refund.  If there are anomalies, the record will be flagged for further investigation and follow-up.  Investigations will soon have a significantly higher success rate by allowing the initial screening process to become more automated, and spending time where it is most needed – in the investigation stage.