Hide and Seek with Fraud

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‘Okay everyone? I will count and you go hide? 10…9…8…7…’? If that doesn’t bring back childhood memories, I don’t know what else will. There is nothing like a good game of hide and seek, especially when you’re playing for money and jail time against the U.S. government. According to an article in The Examiner, one couple’s game of hide and seek came to an end, and the seeker sent them straight to prison.

A Kansas City couple made headlines when their long lasting game of hide and seek with the U.S. government came to a quick halt. After they tried to shuffle around over $800,000 in stolen tax refunds amongst bank accounts, the Internal Revenue Service (IRS) found the evidence it needed to take down the fraudsters. (Come out; come out, wherever you are!) Court documents explained the couple filed fraudulent tax return forms and ”received $800,000 in refunds for taxes they claimed were withheld on interest they had earned.’? Here’s the catch? the couple did not earn any of the money, or pay taxes for it. In fact, none of the banks, creditors and lenders listed on the couples’ tax forms issued any documents to them.

It gets better..? The IRS attempted on multiple occasions to recover the funds, but the fraudsters wouldn’t let go of their cash so easily. Instead, they mailed two false checks to the IRS totaling $1.3 million. This not terribly clever deception ultimately led to the husband’s two convictions of utilizing fictitious obligations. The investigation further uncovered the refund checks received by the wife, in the amounts of $582,277 and $4,215, and the husband for $223,726. The money was tracked through various bank accounts and to the purchase of a sports utility vehicle (there we go again…fraudsters love their fancy wheels) valued at $50,529. The couple was convicted on all 11 counts for which they were indicted. The husband was sentenced to 12 years and seven months of jail time, while the wife was sentenced to five years and 11 months in jail. The couple was ordered to repay the U.S. government $810,218 in restitution. The government already had seized $129,000 in assets. (Finally! A conviction I can handle – tough on the time, for a big crime.)

Hide and seek is about strategy. However, it’s hard to strategize how to successfully hide over $800,000 from the IRS forever.

Source: Today’s ”Fraud of the Day” is based on an article titled, ”Oak Grove Couple Sentenced for Tax Fraud Scheme,” published by The Examiner on June 17, 2013.

Kansas City, MO —

An Oak Grove couple were sentenced in federal court Monday for an $800,000 tax fraud scheme.

U.S. District Judge Dean Whipple sentenced Joshua Simonson, 35, and his wife, Kristen Simonson, 35, to federal prison without parole. Joshua Simonson received a sentence of 12 years, 7 months, while Kristen Simonson got five years, 11 months. Whipple also ordered the Simonsons to pay $810,218 in restitution. The government had already seized $129,000 in assets from the couple.

 

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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.