A Drop in the Bucket

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Fraud can go undetected when small amounts of money are taken over time. An article published by the Capital Gazette tells the story of one woman who ran a small scale tax fraud scam and stole more than $12,000 in Maryland state tax refunds. (She probably thought that the government wouldn’t bother with her scam because it was a drop-in-the-bucket compared to other large-scale tax refund fraud schemes.)

The woman in this case carried out her scam by filing state tax returns through an online tax preparation service. She stole $12,527.83 by submitting five false returns over two tax seasons for herself and three others. The fraudster received one check and the rest of the refunds were deposited directly into multiple bank accounts that she held.

The fraudster pleaded guilty to theft and was sentenced to five years with all but six months of the term suspended. The 32-year-old was also ordered to pay more than $4,000 in restitution.

Most fraudsters fail to consider the ramifications of their illegal actions. The woman in this case probably thought that government investigators would be too busy chasing down other bad guys to pay attention to the few bogus returns she submitted. (When there is a little fraud here and a little fraud there, drops-in-the-bucket can add up to an ocean of fraud.)This case demonstrates that the government is never too busy to halt illegal activities that steal funds from honest taxpayers.

Source: Today’s ”Fraud of the Day” is based on an article entitled, ”Upper Marlboro woman sentenced to six months for tax fraud,” published by the Capital Gazette on March 23, 2016.

Upper Marlboro woman pleaded guilty to theft Wednesday in Anne Arundel Circuit Court in connection with a fraudulent tax scheme.

Markena Townsend, 32, filed five fraudulent tax returns in the 2008 and 2009 filing seasons, and received more than $12,000 in state refunds. She filed the returns using an online tax preparation service for herself and three other people, the Maryland Comptroller’s Office said.

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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.