Unsuspecting Victims


The Internal Revenue Service (IRS) reports that in 2017, the number of taxpayers who reported tax-related identity theft declined by 50 percent. While this sounds like great news, identity thieves are becoming increasingly savvy at finding new ways to steal money from unsuspecting victims every day. Today’s fraud article focuses on two women from Chicago, Illinois who were caught during the government’s recent crackdown on Stolen Identity Tax Refund (SIRF) fraud.

A 27-year-old Chicagoan and her 45-year-old co-conspirator were nabbed after trying to file more than 850 fraudulent tax returns seeking more than $2.7 million in refunds over four tax years. (They also had the help of a third co-conspirator.) Together, they stole the personal identification information of thousands of unsuspecting victims to carry out their scheme. Then they directed others to provide legitimate addresses where the refund checks could be delivered. (The tax returns were collected and deposited into bank accounts that were opened by the perpetrators.)

While the article does not say how the stolen identities were obtained, you can count on the fact that everything can be bought for a price. (For individuals with high credit scores, basic information such as a Social Security number (SSN), birthdate and full name can fetch up to $80 on the digital black market.)

The two women from Chicago pleaded guilty to conspiracy to steal public money, theft of public money and aggravated identity theft for masterminding the scheme to commit Stolen Identity Tax Refund (SIRF) fraud. The younger woman was sentenced to 30 months in prison to be followed by two years of supervised release. She also has to shell out $1,332,935 in restitution to the IRS. Her older accomplice was sentenced to three years behind bars.

While the cost to the perpetrators is generally low (unless they get caught), it’s hard to assign a cost for the pain and anguish experienced by the unsuspecting victim. (Think about the amount of stolen funds, loss of personal time required to solve the problem, legal costs, not to mention the mental anguish victims endure.) While the victims in this case did not suspect they’d ever be victims of stolen identity refund fraud, I suspect that these fraudsters are now counting their costs. (Let’s hope that a little prison time, restitution and a permanent record might be enough to dissuade others from trying the same heinous crime, although I’m not holding my breath.)

As tax season approaches, it is more important than ever to protect your personal identity. (Have you ever stopped to think of the many places you have divulged personal information? Identity thieves are not shy when it comes to victimizing others.) The IRS has some great tips for protecting yourself from becoming an unsuspecting victim of Stolen Identity Tax Refund (SIRF) fraud.

Today’s “Fraud of the Day” is based on an article entitled, “Chicago woman sentenced to prison for fraudulent tax scheme,” published by the Chicago Tribune on November 7, 2017.

A Chicago woman has been sentenced to 30 months in federal prison for conspiring to file fraudulent tax returns using stolen identities.

Federal Justice Department officials announced the sentence Friday.

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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.