Neighborhood Fraudster


How well do you know your neighbors? While many of us may socialize with the folks who live on our street on a regular basis, that doesn’t mean we know who they really are. An Ohio man, who considered himself to be the neighborhood tax preparer, turned out to be quite accomplished at filing false tax returns.

The neighborhood tax man paid recruiters a referral fee for providing personally identifiable information about others. (I wonder if he paid his neighbors to help him carry out his scheme. Who knows, maybe neighbors were spying on other neighbors and collecting personal information, all without knowing they were all working for the same guy.) The tax fraudster then used the illegally-gained personal information to file bogus tax returns, which included tax credits for businesses that did not exist.

Over three tax seasons, the man falsely claimed more than $100,000 in tax returns from the Internal Revenue Service. He deposited the refunds into numerous personal and business bank accounts. (He obviously controlled the financial accounts that were set up in the names of his victims.)

The 45-year-old tax preparer was found guilty of conspiracy to defraud, filing false tax claims, aiding in the preparation of false tax returns, wire fraud and aggravated identity theft. He received a sentence of 70 months in prison and will pay $100,230 in restitution. (What about all those folks who had their identity stolen? Do they get anything to make up for the headaches they have had to incur while trying to repair their damaged credit?)

So, what’s the moral of the story? Perhaps it ‘s good to be wary of neighbors you don’t know well and ask more questions of those you do know. Don’t immediately trust someone who suspiciously volunteers to bring in your mail or feed your pet while you’re on vacation. (You’re handing them the keys to your kingdom.) What this man did was not a very neighborly thing to do. (And he ‘s about to move into a new neighborhood that’s not likely to be very friendly to him either. What goes around comes around.)

Source: Today’s “Fraud of the Day” is based on a Department of Justice press release entitled, “Cleveland Heights man sentenced to nearly six years in prison for identity theft and tax fraud,” posted by on June 22, 2017.

A Cleveland Heights man was sentenced to nearly six years in prison for identity theft and tax violations, said U.S. Attorney Carole S. Rendon and Troy N. Stemen, Acting Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office.

Darryl E. Farmer, 45, was found guilty last year of one count of conspiracy to defraud, nine counts of false tax claims, eight counts of aiding in the preparation of false tax returns, two counts of wire fraud and two counts of aggravated identity theft.

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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.