Top Priority

8
17542382 - u s income tax return forms 1040,1065,1120

One of the Internal Revenue Service’s (IRS) top priorities is to prosecute criminals who use stolen identities to bilk the U.S. Treasury through the filing of fake tax returns. A recent Department of Justice press release tells about a successful prosecution and conviction of an Alabama man who tried to get away with Stolen Identity Refund Fraud (SIRF) by using the personal information of multiple individuals, including prison inmates.

The Department of Justice reports that SIRF crimes cost the government billions of dollars annually. Statistics show that during the 2013 filing season alone, more than five million tax returns claiming approximately $30 billion in refunds were filed using stolen identities.

SIRF involves the stealing of personally identification information (PII) such as Social Security numbers (SSN). The stolen data is then used to electronically file false tax returns. Generally, electronic income tax refunds are processed quickly through electronic payments to bank accounts and debit cards. (Who wouldn’t want to get free money with just the click of a button?)

The Alabama resident obtained many of his victim’s PII by paying co-conspirators for their assistance. (Most of the stolen data belonged to residents in the Pittsburgh, Pennsylvania area.) He also obtained identities of prison inmates from jail records. (The fraudster used those identities to submit bogus tax returns and directed the IRS to deposit the fraudulent refunds into bank accounts or onto prepaid debit cards he controlled.)

The fraudster pleaded guilty to involvement in the SIRF scheme. He is currently facing a maximum sentence of 20 years in prison and a $250,000 fine for mail fraud. In addition, he may also receive a mandatory two-year minimum sentence and another $250,000 fine for aggravated identity theft plus mandatory restitution.

This case is another example of how the government is adamant about hunting down criminals who try to steal from the government and honest taxpayers. Of the $30 billion in fraudulent claims submitted in 2013, the IRS was able to stop or recover over $24 billion or about 81 percent of the bogus claims. Congratulations to all of the investigators involved that stopped this fraudster from doing further damage

Source: Today’s ”Fraud of the Day” is based on a Department of Justice press release entitled ”Alabama Man Pleads Guilty to Involvement in Stolen Identity Refund Fraud Scheme” released on July 13, 2015.

A Montgomery County, Alabama, resident pleaded guilty to one count of mail fraud and one count of aggravated identity theft for his involvement in a stolen identity refund fraud (SIRF) scheme, Acting Assistant Attorney Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney George L. Beck Jr. of the Middle District of Alabama announced today.

According to court documents, Jerome Marcel Newton obtained the personal identifying information of others in various ways, including by paying other individuals to collect multiple identities or by recruiting people to provide their identities to him. Although Newton resided in Alabama, a number of the identities were of people living in Pittsburgh. Newton also obtained the identity information of prison inmates from jail records. In 2011, Newton used the identities he obtained to file false tax returns, directing the Internal Revenue Service (IRS) to deposit the fraudulent refunds claimed on those returns into bank accounts that he controlled or onto prepaid debit cards. Some of the prepaid debit cards were then mailed to addresses within the Middle District of Alabama.

Read More

SHARE
Previous articleFinding the Truth in Fiction
Next articleViolation of Trust
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.