School of Hard Knocks

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It can be hard to make ends meet when first launching a career. Salaries are usually low in the beginning, and some people find it necessary to have more than one job to keep ahead of the creditors. An article published on SILive.com follows a young school teacher who moonlighted as a fraudster to generate extra income for her lavish lifestyle.

The story states that a New York City public school teacher was involved in one of the nation’s largest and longest running scams involving identity theft and tax refund fraud. The 29-year-old teacher and other alleged co-conspirators were accused of filing more than 8,000 fraudulent U.S. income tax returns seeking $65 million in fraudulent tax refunds over a seven-year period.

The scam targeted residents of Puerto Rico. The fraudsters used their victims’ Social Security numbers, plus other personal identification information to steal more than $12 million from the federal government.

It is alleged that the school teacher, who received $1 million for her own illegal actions, either cashed the fraudulent refunds or sold them to other alleged co-conspirators at a discount. She used her portion of the illegal proceeds to live a lavish lifestyle and take multiple luxurious vacations. (Since the general consensus is that teachers are underpaid, a few expensive trips may have raised some eyebrows.)

According to the article, she charged $123,000 on her credit card in one year. (She would have to do a lot of after-school tutoring to pay off that gigantic bill, or she could just steal it from innocent, law-abiding taxpayers.) Previous credit card statements showed that she had only charged between $400 and $900 on the same card in prior years.

The young woman pleaded guilty to one count of conspiracy to defraud the United States and one count of theft of government property. She is facing up to 15 years in prison and $500,000 in fines.

Teachers are supposed to be good examples for their students. Whether she was desperate to pay her bills or lacked experience with making good decisions, this teacher certainly got started off in her career on the wrong foot. Hopefully, she has learned her lesson in the school of hard knocks and will make amends by taking responsibility for her actions. (That’s a lesson that everyone needs to learn.)

Source: Today’s ”Fraud of the Day” is based on an article titled, ”Staten Island Teacher Pleads Guilty to Role in $65 Million Tax Fraud Scheme,” written by Maura Grunlund and published by SILive.com on August 2, 2014.

NEWARK, N.J. — New York City public schools teacher Elian Matlovsky, 29, of Staten Island, pleaded guilty to her part in what federal authorities described as one of the nation’s largest and longest running identity theft tax refund fraud schemes, U.S. Attorney Paul Fishman announced Thursday.

Ms. Matlovsky, a public schools employee for nearly eight years, was part of a scam that lasted for at least seven years and involved dozens of suspects in New York and New Jersey who targeted mostly residents of Puerto Rico for 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.