Cold, Hard Fraud

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It’s hard to say what causes criminals to defraud, but usually cold, hard cash is the central motivating force. (Unfortunately, in order for fraudsters to make a profit from their unscrupulous activities, a victim has to suffer a loss.) An article published in the Lexington Herald-Leader tells about a conspiracy that netted $600,000 by using stolen identities to file false federal income tax returns.

The story states that over a two-year period of time, the ringleader was aided by four co-conspirators. (Further research reveals that he used the names of those involved in the conspiracy, as well as stolen identities, to carry out the scam. Apparently, he made up details regarding employment, income, residences and expenses when completing the bogus tax forms.) The ringleader claimed more than $3.7 million in tax refunds from the Internal Revenue Service.

The 52-year-old ringleader was sentenced to more than 14 years in prison for wire fraud, aggravated identity theft and conspiracy to defraud the federal government. The judge ordered restitution of $636,379 to be paid. The ringleader and another co-defendant are responsible for $107,500 of that amount. Three of the co-conspirators have pleaded guilty and a fourth accomplice is scheduled to be sentenced.

Because fraudsters are greedy, they will do just about anything to make an easy buck without regard to those victimized by their crime. Although motivated by cash in the beginning, they forget to think about the cold, hard facts regarding fraud – if caught, they will be punished.

Source: Today’s ”Fraud of the Day” is based on an article titled, ”Stealing identities to File False Tax Returns Earned Lexington Ringleader 14-plus Years in Prison,” written by Beth Musgrave and published in the Lexington Herald-Leader on January 29, 2015.

A 52-year-old Lexington man was sentenced Wednesday to more than 14 years in prison for leading a conspiracy to use stolen identities to file false federal income tax returns that netted more than $600,000.

U.S. District Court Judge Danny Reeves sentenced David L. Pierce to 175 months in prison for wire fraud, aggravated identity theft and conspiracy to defraud the federal government. In addition, Reeves ordered more than $636,379 in restitution to be paid. Of that amount, Pierce and another defendant are responsible for more than $107,000.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.