Betrayed by Trust

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Fraudsters are experts at betrayal. But before betrayal can happen, one must trust in the betrayer. An article published in The Franklin County Times tells the story of one woman and 20 other individuals who betrayed the government by stealing more than $10 million through a tax fraud scheme.

The article states that the woman was a Certified Acceptance Agent authorized by the Internal Revenue Service (IRS) to help individuals and immigrants, who don’t qualify for a Social Security number (SSN), to obtain an Individual Taxpayer Identification Number (ITIN) for the purpose of processing tax forms. (The agent is supposed to review the applicant’s identity and immigrant status information to make sure the required documents are authentic, complete and accurate before forwarding to the IRS.)

Instead of doing her job entrusted by the IRS, the woman and her co-conspirators filed false ITIN applications, false income tax returns and collected the preparation fees for the bogus tax refunds. On top of that, she also filed fake tax returns for her tax preparation business, as well as for herself. (Those actions definitely qualify as betrayal.)

The 40-year-old woman pleaded guilty to one count of conspiracy to defraud the United States, six counts of mail fraud and one count of money laundering conspiracy. She was sentenced to more than eight years in prison, three years of supervised release and must pay restitution of more than $10.5 million. She was also required to forfeit approximately $400,000 seized as part of the case.

The fraudster also allegedly had the help of her husband and a multitude of other alleged co-conspirators, who all happened to be foreign nationals. Sentences for 16 of the defendants who pleaded guilty ranged from 19 to 42 months in prison. Several of the defendants remain fugitives overseas, while one who was arrested in Panama is currently scheduled for a trial.

This case proves that the government is willing to pursue and prosecute criminals who commit tax crimes no matter the location. There is no tolerance for those who betray the government and violate the country’s tax laws.

Source: Today’s ”Fraud of the Day” is based on an article titled, ”Arias Sentenced for Tax Fraud,” written by Kellie Singleton and published by the Franklin County Times on November 25, 2014.

A Spruce Pine woman will spend time in prison for her role in conspiracies to file false tax returns and commit money laundering, according to U.S. Attorney Kenneth Allen Polite, Jr. and Acting Deputy Assistant Attorney General Larry J. Wszalek of the Justice Department’s Tax Division.

Jacqueline J. Arias, 40, of Spruce Pine, was sentenced by U.S. District Court Judge Helen G. Berrigan to 97 months in prison, three years of supervised release, and restitution to the United States totaling $10,589,326. Arias was further ordered to forfeit nearly $400,000 in United States currency that was seized as part of the case.

 

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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.