Neither Snow, nor Rain nor Fraudsters

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21610268 - woman taking some letters from mailbox

Postal carriers have a tough job. They not only have to deliver mail during a variety of extreme weather events, but also occasionally get chased by dogs while doing their job on foot. AccountingToday.com details the story of one mailman in Georgia who went above and beyond the call of duty. He helped catch a tax preparer, who was involved in a tax refund fraud scheme that filed millions of dollars in phony tax returns.

The article reports that a 27-year-old, who operated a tax service business in Clayton County, conspired with two other employees to file more than $19 million in bogus tax returns. The tax preparer convinced his victims that they could apply for government stimulus payments, by providing their names and Social Security numbers. (Remember, if it sounds too good to be true, run the other way!)

The trio of fraudsters collected the victims’ personal information through toll-free telephone numbers, web sites, flyers, radio ads and word-of-mouth. Other sources included prisons and homeless shelters. (Sounds like they left no stone unturned.)

The tax preparer filed false income amounts and student credits on the fraudulent returns to produce the refunds, then directed the federal government to wire the refunds to bank accounts controlled by him or his co-conspirators. Court records show that more that more than 1,600 refund checks plus letters from the IRS, the Social Security Administration and other government agencies addressed to the victims were mailed to the tax preparer’s home address. (This is where the mailman comes in.) The plethora of mail addressed to a variety of recipients raised the suspicion of the postal carrier, who then seized more than 1,000 of the checks and turned them over to law enforcement. After searching the tax business location, federal authorities discovered a number of lists containing personal information that was used to file the fake returns.

A jury found the tax preparer guilty to conspiracy, wire fraud and aggravated identity theft. He faces a pretty hefty prison sentence (up to life in prison) and fines. One of the co-conspirators stuck a plea deal in which he agreed to forfeit his interest in 17 pieces of real estate, thousands of dollars seized from his bank accounts and more than 80 electronic devices or pieces of jewelry. In addition, he will pay at least $7 million and full restitution to the federal government. The other co-conspirator pleaded guilty to conspiracy. The three are awaiting sentencing.

An inscription on a New York City post office reads, ”Neither snow, nor rain, nor heat, nor gloom of night stays these couriers from the swift completion of their appointed rounds.” Kudos to the postal carrier in Georgia, who prevented more victims from being taken advantage of by alerting the authorities of these criminals. Perhaps the words ”nor Fraudsters” should be added to the famous quote.

Source: Today’s ”Fraud of the Day” is based on an article titled ”Tax Fraud Blotter: Score One for the Mailman!” by Jeff Stimpson and published by AccountingToday.com on December 20, 2013.

STOCKBRIDGE – Preparer Bernando O. Davis, 27, has been found guilty of conspiracy, wire fraud and aggravated ID theft for using stolen identities to file false federal income tax returns that claimed millions of dollars in bogus refunds.

According to authorities, from approximately July 2010 to January of this year Davis operated Davis Tax Service in Clayton County, Ga. Working with others, including Kevin J. Sonnier and Carla L. Jefferson of Palmdale, Calif., Davis led thousands of victims to believe that they could apply for ”government stimulus payments” or ”free government money” from the federal government by providing their names and Social Security numbers.

 

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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.