Sisters Sentenced to 115 Months in Prison in Connection with Identity Fraud and Tax Refund Fraud Case

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The concept of stealing someone’s identity has been around a long time. But in today’s Fraud of the Day from WFSA.com, the fraudsters added a new twist: stealing identities for other people?

The article reports that two sisters from Montgomery, Alabama were recently sentenced for their roles in a scheme in which they used their tax return preparation business to file phony income tax returns using stolen identities. Court documents indicated that between 2005 and 2008 these women filed tax returns for their customers using false information in order to obtain higher refunds from the government (it’s like Robin Hood, for tax fraud). They also fabricated driver’s licenses and Social Security cards to put in customer files based on the stolen identities. The women encouraged their customers to provide false information in order to increase their tax refund amounts. (No, no, lying to the government is part of the tax return process. Get it?)

The sisters were each sentenced to 115 months of prison time and have been ordered to pay $504,305 in restitution to the government. An investigator from the Internal Revenue Service (IRS) Office of Criminal Investigation stated: ”IRS Criminal Investigation has made investigating refund fraud and identity theft a top priority and we will vigorously pursue those who undermine the integrity of the U.S. tax system.”

Hopefully the sisters’ scheme inspires other government agencies to make identity theft a top priority, as well. So, what is your agency doing to prevent and/or protect against identity fraud?

Source: Today’s ”Fraud of the Day” is based on an article ”Alabama Sisters Sent to Prison for Roles in Stolen Identity Refund Fraud” published by WSFA.com on May 16th, 2012.

WASHINGTON, D.C. – Loretta Fergerson and her sister, Tracey Fergerson, both of Montgomery, Ala., were each sentenced to 115 months prison for their involvement in a conspiracy to file claims for false income tax refunds using stolen identities, the Justice Department and Internal Revenue Service (IRS) announced today. U.S. District Judge Mark Fuller ordered the Fergerson sisters to pay $504,305 in restitution to the IRS.

According to court documents, Loretta Fergerson owned and operated a tax return preparation business called Fast Tax Cash in Montgomery. From 2005 through 2008, Loretta and Tracey Fergerson filed tax returns using stolen identities in order to claim fraudulent tax refunds. Additionally, Loretta Fergerson and her employees filed tax returns for Fast Tax Cash customers that contained false information in order to obtain higher refunds for customers. Loretta Fergerson also created false driver’s licenses and false Social Security cards to be placed in customer files for returns that were prepared using stolen identities.

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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.