Home Sweet Fraud

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14096970 - payment machine

It’s usually in southern tradition to make someone feel at home. Southern hospitality is about as common in most parts of the south as collard greens and Sunday church. An Alabama.com article revealed another commonality making an appearance in the south – fighting tax refund fraud.

Tax preparers are trusted with personal and financial information, under the assumption they will not abuse their privileges. One Alabama tax preparer, and her team of five, clearly took advantage of that trust. (If only there was a way to do a tax preparer screening to prevent these situations!? Court documents said that the fraudster and her co-conspirators submitted over 1,000 tax returns between October 2009 and April 2012, claiming more than $1.7 million. Investigations also provided the court with a little background on the workings of the scheme – noting that most tax returns were filed from the fraudster’s home. She ”received instructions on how to file false tax returns and admitted to filing false tax returns for real clients.’? Additionally, she used a network of individuals to launder the tax refunds, and then recruited individuals to buy prepaid debit cards, where the returns were then directed.

And, what about the identities? The article reports that ”she obtained stolen identities from multiple sources, including Alabama state databases.”

Investigations revealed the fraudster was previously charged with a criminal complaint, where she pleaded guilty to one count of conspiring to file false tax returns and one count of aggravated identity theft. The Assistant Attorney General for the Justice Department’s Tax Division commented? ”The Justice Department will not tolerate criminals stealing people’s identities and robbing the public… We will prosecute and seek just punishment against those who commit stolen identity refund fraud.” (That’s what I’m talking about!)

The fraudster pleaded guilty to one count of aiding and abetting the false presentation of a false tax return. Her sentencing is scheduled for February, when she will face between two and 15 years in prison, restitution and a maximum fine of $750,000.

From the looks of it, the owner of the tax service company was just showing some ”hospitality” by teaching employees how to commit tax refund fraud. The moral of the story is? some hospitality isn’t always needed. I’m sure the jail’s hospitality won’t be so accommodating.

Source: Today’s ”Fraud of the Day” is based on an article entitled, ”Former Montgomery Tax Preparer Pleads Guilty to File More Than $1 Million in False Tax Returns,” written by Erin Edgemon and published by Alabama.com on October 31, 2012.

MONTGOMERY, Alabama — A former tax preparer at Premier Tax in Montgomery pleaded guilty today in federal court for filing more than one million worth of false tax returns using stolen identities, the U.S. Justice Department and Internal Revenue Service announced.

Antoinette Djonret pleaded guilty in that case and in a case involving the filing of false tax returns for clients.

 

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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.