Using Rags for Riches

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38799675 - hundred dollar bills on wood table

There is nothing like hearing a story of success about an individual who went from ”rags to riches.’? It takes gumption to build success out of nothing. Of course, there is always the flipside of that coin? the coward who steals from the poor. According to an article in U-T San Diego, two men were found guilty of just that? stealing from the poor to make themselves rich.

Have you ever been to the West Coast? If you’re a native to the East Coast or Midwest, you’re likely to find that life on the West Coast is a little different from life anywhere else. (TV and movies celebrate West Coast living far past the reality.) California, taking up a large portion of the West Coast, is home to the growth of pop culture, technology start ups and inspiring fraudsters. Two California tax preparers (Let’s call them ”Team Tax Fraud.”) were found guilty of conspiracy to commit fraud after an investigation revealed their three-year tax refund scam. Team Tax Fraud will spend 10 months in prison and will have to pay $268,832 in restitution. But what made the fraud successful for three full years?

Investigators revealed the workings of the scam, explaining to the court that Team Tax Fraud targeted a particular type of client by soliciting homeless people, single mothers, drug addicts and poor people with the promise of giving them government money in exchange for their signature on a blank income tax form. Team Tax Fraud then filled the forms in with inaccurate information, submitting nearly 1,000 forms in the three-year period. The fraudsters kept most of the money as ”fees,” but did provide a small portion to their easily tricked clients. They managed to get up to $8,000 on one false refund claim, as well as evaded paying $35,000 of their own taxes by filing their own fraudulent tax forms. Officials discovered where the money went: to drugs, a Humvee, a sport-fishing trip, a deluxe-suite in a Gaslamp district hotel and various other luxuries. The fraudulent team pleaded guilty to all charges prior to sentencing. (Hi, yes I did horrible things to defraud needy people, but please forgive me because I don’t want to go to prison.)

This is a definitely a new side of ”West Coast” living that I’m not accustomed to. I wonder if these guys ever thought they’d get caught? I’m assuming they believed this to be a fool-proof plan. Enjoy the riches to rags effects, gentlemen.

Source: Today’s ”Fraud of the Day” is based on an article titled, ”Two Get Prison for Tax Fraud Using Poor, Homeless,” written by Pauline Repard and published by the U-T San Diego on May 10, 2013.

SAN DIEGO — Two men who admitting fleecing the Internal Revenue Service and the poor or homeless in San Diego during a three-year tax-fraud scheme were sentenced Friday to 10 months in prison, federal prosecutors said.

U.S. District Judge Anthony Battaglia ordered Isaiah Konkus of San Diego and Justin Petersen of Lakeside, both 38 years old, to federal prison and to pay $268,832 in restitution.

 

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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.