Headed to the Slammer

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Oh, sweet home Alabama. This is the heart of Dixie – full of pride and the Crimson Tide. And, now – according to today’s Fraud of the Day from WSFA – tax refund and identity fraud. Fear not, the story has a happy ending…Alabama shows exactly how fraudsters fit into the state’s scenery? as convicts.

The article reported that a state employee recently pleaded guilty to charges accusing her of defrauding the federal government through an elaborate scheme involving prisons. She obtained identity information, while working as a state employee, of individuals within the state prison system. She then provided those identities to a co-conspirator, in exchange for money, who filed false tax returns then claimed monies into specifically directed bank accounts and debit cards. (Most people try to stay away from prison! What is she thinking using that as an accessory to fraud??

She faces a maximum sentence of 32 years in prison, three years of supervised release, restitution and a maximum fine of $750,000. Our fraudster’s co-conspirator has already been sentenced to 61 months in prison. (I’m sure she’s quite the topic of conversation around the prison water cooler.)

A couple of thoughts spring to mind. The first thought is a reminder? government agencies – like the correctional system in today’s example, doctor’s offices, hospitals and schools are all places where personal information is collected and/or maintained. Unfortunately, any place where personal information is maintained also is a potential target for identity thieves to steal identities.

The second thought is rooted in the solution to the problem. The fraudster in this case used her unique access to a particular set of state public records – prisoner information – to steal identities and use them to file bogus tax refund requests. Prisoner identity information data is all maintained in public records. All that is needed to prevent the fraudster from being successful is to first verify and authenticate the identity of the individual requesting the refund via a simple check against a public records database using an identity-based filter.

Problem solved. Don’t you wish everything was that simple?

Source: Today’s ”Fraud of the Day” is based on an article titled, ”State of Ala. Employee Guilty on Stolen ID Refund Fraud,” published by WSFA on September 12, 2012.

MONTGOMERY, AL -Natacia Webster, an employee of the state of Alabama, pleaded guilty Wednesday to charges of conspiring to defraud the United States by filing false claims, wire fraud and aggravated identity theft, announced George L. Beck, Jr., U.S. Attorney for the Middle District of Alabama.

According to the indictment and other court documents, in 2011, Webster obtained identity information while working for the State of Alabama and provided that information to co-conspirator Melinda Clayton.

 

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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.