Florida Inmate Accused of Tax Refund Fraud Scheme

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36419152 - judge looking the condemned prisoner in the court room

Some people go to prison, repay their debt to society and are rehabilitated. Unfortunately, that isn’t always the case. I’ve written before about instances in which fraudsters orchestrate fraud (e.g., unemployment fraud, tax refund fraud) from behind bars. And, that’s what’s alleged by prosecutors in today’s Fraud of the Day from WTXL.com.

A 53-year-old inmate, currently serving time at a correctional institution in Sneads, Florida is accused of participating in a tax refund scheme with some of his fellow inmates and obtaining refund checks. Court documents say that in January 2008, the defendant and fellow inmates began using the names and Social Security numbers of prisoners to complete tax refund forms. Investigators also say that he listed company names on the forms and falsely claimed they were employers, providing fraudulent income information. The indictment claims the checks were sent to the defendant’s mother’s house, among other addresses. It also asserts that the fraud amounted to approximately $179,349 in falsely claimed refunds from 84 applications.

The defendant was charged with one count of conspiracy, one count of mail fraud, 16 counts of theft from the government and 27 counts of submitting false claims. The defendant is, of course, innocent until proven guilty. The justice system will resolve the issue.

The article, however, raises a good question? how easy is it for inmates to perpetrate fraud from prison? (Pretty easy. They have a lot of time on their hands.? Perhaps the more important question is ”what can states and the federal government do to prevent fraud?” The answer is simple. The problem described by the article hinges on the potential for identity-based fraud, and solving identity-based fraud requires an identity-based solution. By leveraging public records and data analytics to verify and authenticate identities, agencies can stop fraud before they write the checks.

So, the question for the day is? how can your agency leverage an identity-based fraud filter?

Source: Today’s ”Fraud of the Day” is based on an article titled, ”Inmate Indicted for Tax Refund Scam Totaling More Than $150K,” published by WXTL.com on July 18, 2012.

TALLAHASSEE, Fla. – An inmate in the Apalachee Correctional Institution is being indicted for an income tax refund scam that involved other prisoners, according to a document from the U.S. Department of Justice.

The inmate, 53-year-old Michael William Joseph II, and other prisoners allegedly devised the scheme around January 2008. The inmates used the names and social security numbers of other inmates housed in the Florida Department of Corrections to file fraudulent tax returns. The home address of Joseph’s mother and others were listed on the tax returns, so IRS refund checks would be mailed to them.

 

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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.