Deploying a Solution to Combat Fraud

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Military members are vulnerable to identity theft, fraud and scams, particularly during a deployment. But, service members don’t have to be halfway around the world to become a victim. (It can happen stateside too.) A man from Harvey, Illinois committed identity theft and tax fraud by stealing the names and Social Security numbers (SSNs) of U.S. Air Force service members, collecting more than half a million dollars in tax refunds in his victims’ names.

Over four months, the fraudster and at least two co-conspirators prepared and filed approximately 225 fraudulent income tax returns with the Internal Revenue Service (IRS), seeking around $845,979 in tax refunds. The illegally-obtained money was deposited into bank accounts he controlled. (And, I’m sure a shopping spree ensued shortly thereafter.)

The 34-year-old mastermind pleaded guilty to identity theft and tax fraud and was sentenced to 63 months in prison. He will also be required to serve four years of supervised release and pay $593,786 in restitution to the IRS.

Being deployed can be pretty stressful, then add in the catastrophe of having your identity stolen and the realization that your financial future is in jeopardy. Service members, as well as anyone else who is at risk for identity theft (which is everyone), can take a few simple steps to lessen the possibility of becoming a victim.

The Identity Theft Resource Center (ITRC) recommends that military personnel conduct most of their banking and financial transactions online. While being deployed could increase security risks due to shared computers, tough to crack passwords can help secure your financial accounts.

Another tip is to never store your password on computers that will be accessed by other users and definitely make sure that you log out of your financial institution’s website before closing the web browser. (Don’t just close the browser window without logging off.) Military members can also request an Active Duty Fraud Alert from credit reporting agencies which will remain in effect for one year. (Your identity has to be verified before a line of credit can be opened in your name.)

Members of the military who give Power of Attorney (POA) to someone else before they deploy need to make sure they trust the person to whom they are giving the “keys to the kingdom.” (You don’t want to return from deployment to find your credit limit maxed out, your bank accounts emptied, and new contracts for cell phones, utilities and loans signed in your name.)

The Judge Advocate General’s office for each branch of the military should have a complete document that outlines a list of things to consider before granting a POA.

Another general tip is to contact the three credit reporting agencies to see if any unauthorized credit checks have been run. (Since you are allowed one free credit report from each agency, contact a different agency every four months to keep tabs on your credit.) Any of these suggestions will be helpful in deploying an effective solution to combat fraud no matter where you are located. For more tips on how to prevent identity theft as a military servicemember, click here.

Today’s “Fraud of the Day” is based on a Department of Justice press release entitled, Illinois Man Sentenced to Prison for Using Stolen IDs of U.S. Air Force Members to File Fraudulent Tax Returns,” released on January 10, 2018.

A Harvey, Illinois, man was sentenced to 63 months in prison today for his role in a stolen identity refund fraud scheme, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney John R. Lausch Jr. for the Northern District of Illinois.

According to documents filed with the court, from around November 2014 to March 2015, Jonathan Herring, 34, working with at least two others, prepared and filed income tax returns with the Internal Revenue Service (IRS) using stolen names and social security numbers of U.S. Air Force service members, and deposited the fraudulently obtained tax refunds into bank accounts that he controlled.  In total, Herring filed approximately 225 fraudulent returns seeking approximately $845,979 in tax refunds.

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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.