Checks and Balances

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Fraud can be tough to identify, unless there are checks and balances employed to catch perpetrators. An article published in The Virginian-Pilot details how a check cashing business uncovered a tax fraud scheme that netted more than $2 million in fraudulent income tax refunds.

The story states that a Virginia check cashing business noticed that one of its employees had cashed an abundance of U.S. Treasury checks – $2,273,119.52 to be exact. When confronted, the employee admitted that she had been paid $200 to cash each check. (Obviously this was a policy violation.) The man who paid the kickbacks was subsequently investigated by the Internal Revenue Service (IRS).

It was determined that this fraudster, along with co-conspirators, stole personal identification information from numerous people and filed nearly 700 bogus tax returns. He made more than $2 million by cashing 640 U.S. Treasury checks at the check cashing business. (By cashing all of the checks at this particular business, he drew attention to his illegal activities. Criminals always mess up somewhere.)

The 52-year-old pleaded guilty to mail fraud and aggravated identity theft. He is awaiting sentencing and faces up to 22 years in prison.

Just as the check cashing business was able to identify that fraudulent activity was occurring, the justice system will make sure that an appropriate penalty will be delivered. Let’s hope that an appropriate punishment will deter others from committing the same crime.

Source: Today’s ”Fraud of the Day” is based on an article titled, ”Norfolk Man Pleads Guilty to $2.2 Million Tax Fraud,” written by Tim McGlone and published in The Virginian-Pilot on October 17, 2014.

A Norfolk man faces up to 22 years in prison after pleading guilty to an identity theft scheme that netted him more than $2.2 million.

Ronald Chisholm, 52, pleaded guilty Wednesday in federal court to mail fraud and aggravated identity theft. He is scheduled to be sentenced Jan. 22.

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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.