Strengths and Weaknesses

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Taxes are complicated. It’s hard to keep on top of deductions and loop holes, not to mention keeping track of all those statements. Many people find that their strengths are not in preparing taxes so they hire tax a preparation service to save time, money and stress. After all, tax preparers’ strengths include being up-to-date on current tax laws and they are a big help in case you get audited. The Rancher reports on two women who got caught for filing more than $200,000 in bogus tax returns with the help of a tax return preparer who had extensive experience in the criminal activity. (My guess is that there was an audit involved somewhere.)

In order to commit tax fraud, you need someone who can help prepare fraudulent tax returns. The story states that the two women interviewed a tax return preparer in 2013, then hired him to prepare and electronically file false tax refund claims for them. (I wonder if the first question in the interview was, ”What are your strengths and weaknesses as a criminal?”) The partners in crime provided the tax preparer with personal identity information, including Social Security numbers stolen from 37 people. According to court records, the names had been previously used to obtain tax refunds. (Once your identity has been stolen, there is no telling how many other criminals will get their hands on your information.)

The women obtained more than $220,000 in refunds from the bogus returns through ATM debit card routing numbers. The refund amounts were credited to multiple cards so withdrawals could not be easily traced.

That’s not the only thing those two were up to. When arrested, the dynamic duo had another 16 names and identification information in their possession. It turns out they were going to file a second set of false returns worth an additional $200,000 with their tax preparer friend. Luckily, federal law enforcement officials put the kibosh on the use of the stolen identities and prevented any loss to the government in 2013. However, it turns out that losses of $60,000 were traced to the two and fraudulent tax returns filed for 2012.

Both women accepted a guilty plea and will each serve two years in prison and pay $60,000 in restitution to the federal government. Then, they will both serve three years of supervised release. So what happened to the tax return preparer? He allegedly continued to prepare client tax returns after he pleaded guilty. (In this case, his perseverance is a weakness because he was dense enough to continue preparing tax returns.) He was sentenced to three years in prison and full restitution for preparing tax returns that generated more than $196,000 in excessive refunds.

This case was prosecuted as part of the Stolen Identity Refund Fraud (SIRF) initiative. It just goes to show that one of the government’s strengths lies in catching weak criminals who aim to do harm to innocent victims and taxpaying citizens.

Source: Today’s ”Fraud of the Day” is based on an article titled, ”Two Women Ordered to Prison in Stolen Identity Tax Refund Fraud Scheme,” published by The Rancher on February 7, 2014.

Yevette Lauren Walton and Lakisha Lashell Rogers have been handed prison sentences for conspiring to submit fraudulent tax refund claims in the names of 53 stolen identities during the 2013 tax season, United States Attorney Kenneth Magidson announced today along with Lucy Cruz, special agent in charge of Internal Revenue Service — Criminal Investigation (IRS-CI). Walton and Rogers were prosecuted as part of IRS-CI’s Stolen Identity Refund Fraud (SIRF) initiative that has resulted in arrests throughout the United States. They entered pleas of guilty May 10, 2013.

”Investigating identity theft and refund fraud is a priority for IRS-CI,” said Cruz. ”Stealing identities and filing false tax returns is a serious crime that hurts innocent taxpayers. We, along with our law enforcement partners and the United States Attorney’s Office, continue to do our part in protecting the sanctity and integrity of the tax system and those individuals whose identities were stolen, as well as recovering any monetary loss against the U.S. Treasury.”

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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.