Zombies at Work

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It is commonly said that the only things we can be certain of in this world are death and taxes. But today’s ”Fraud of the Day” raises a question about the uncertainty of fraudulent tax returns using the stolen identities of the deceased. A California man used the names and personally identifiable information of deceased people to submit more than $1.5 million in fraudulent tax returns to the Internal Revenue Service (IRS).

When a death date is not properly recorded in the Social Security Administration’s Death Master File, there are criminals who will leap at the chance to take advantage of personal information belonging to the deceased. In this case, the defendant and his co-conspirators stole identities from the state of California death records and submitted federal tax returns showing that the individuals had falsely earned wages and other income, and were subsequently entitled to tax refunds. (This gives a different meaning to Zombies at work.)

Apparently, the California death records and the Death Master File did not match up and over 20 months, the defendants electronically filed the bogus tax returns in the names of the deceased before being caught. Refund checks were sent to physical addresses that were controlled by the fraudsters.

But wait, there’s more to the story of this opportunistic fraudster. He also bought and cashed legitimate tax refund checks and Social Security benefit checks even though he knew they had been stolen. (He used fraudulent California IDs to cash the tax refund and Social Security checks.)

The 46-year-old was convicted of conspiring to steal public money, stealing public money and aggravated identity theft. He was sentenced to 12 years in prison for filing tax returns using the identities of deceased individuals and stealing Social Security and refund checks. His prison term will be followed by three years of supervised release and he must pay restitution of $900,402 to the IRS.

An audit by the Social Security’s inspector general found that 6.5 million Social Security numbers for people born before June 16, 1901 don’t have a date of death recorded in the administration’s database. As this case represents, the lack of a properly noted date of death can cause government agencies to erroneously pay out federal benefits, while also preventing private industry and state and local governments from stopping or preventing identity fraud. While much uncertainty surrounds fraud involving the deceased, there is great certainty that the government will continue to track down and prosecute cases that involve fraudsters stealing benefits they do not deserve.

Source: Today’s ”Fraud of the Day” is based on a Department of Justice press release entitled, ”California Man Sentenced to Prison for Filing Tax Returns in the Name of Deceased Individuals and Stealing Social Security and Refund Checks,” published on February 9, 2017.

Hugh Robinson, a San Pablo, California resident, was sentenced yesterday to serve 144 months in prison for filing tax returns using the identities of deceased individuals and stealing social security and refund checks destined for other individuals, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Brian J. Stretch for the Northern District of California.

In October 2016, Robinson, 46, was convicted of conspiring to steal public money, stealing public money, and aggravated identity theft. According to the evidence presented at his trial, from at least August 2013 through April 2015, Robinson and his co-conspirators took names and personal identification information of deceased individuals from California death records and used them to file income tax returns seeking refunds. Robinson and his co-conspirators directed the refunds to addresses and bank accounts that they controlled. Robinson also bought and cashed legitimate refund and social security benefits checks that he knew had been stolen. Robinson and his co-conspirators obtained fraudulent California IDs and used them to cash the refund and social security checks at various stores, including in the Richmond-area. In total, Robinson intended to cause a loss of more than $1.5 million.

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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.