Not to be an alarmist, but if you somehow forgot to file your 2018 Income Tax Return, you’ve got until 11:59:59 pm tonight. If you need more time, visit the IRS website here to find out how to file  an extension. (Just a suggestion – don’t wait until the last second.)

Now, on to our fraudster of the day, who is a faker. People fake things all the time that aren’t really a big deal in the grand scheme of things. For example, everyone on Facebook can’t possibly be as happy as they appear. And, there are probably quite a few dating profiles that contain a few lies and reveal pictures of individuals that look much better online than they do in person. A Salinas, California woman faked something much more serious. She committed identity theft and tax fraud by faking her way through several thousand tax returns, costing the Internal Revenue Service (IRS) about $7.5 million.

It appears that the IRS is getting aggressive about preventing tax fraud. Statistics from 2015 show that the agency rejected or suspended the processing of 4.8 million suspicious returns. They stopped 1.4 million identity theft returns worth $8 billion and $2.9 billion refunds connected to other types of fraud. The Salinas woman at the center of today’s fraud article submitted more than 2,300 fraudulent tax returns requesting $9.7 million in refunds. (She faked her way through the returns by falsifying wages, dependents, education expenses and tax credits.)

The article does not say how the Salinas woman obtained the stolen identities, but she could have easily purchased them off the dark web for a few dollars. (It’s depressing to find out what your identity is worth. It’s priceless to you, but only worth a few bucks to a criminal.) As a result of her falsified returns, the IRS paid out $7.5 million through direct deposit to a bank account controlled by the Californian.

The 47-year-old was unable to fake her way out of jail time. She pleaded guilty to tax fraud and was sentenced to 30 months in prison to be followed by three years of supervised release. She was also ordered to pay back $7.5 million to Uncle Sam. (I’m sure he’ll be glad to get the check.) As usual, there were others involved in carrying out the tax fraud scheme. Three co-conspirators have been indicted, two have pleaded guilty, but one is on-the-run. (Once that criminal is caught, I doubt they will be able to fake their way out of a prison sentence either.)

Today’s “Fraud of the Day” is based on an article entitled, “Salinas woman sent to prison for $7.5 million tax fraud scheme,” published by The Californian on November 14, 2018.

A federal judge sentenced a Salinas woman to 30 months in prison and ordered her to pay more than $7.5 million in restitution after she used stolen identities to bilk taxpayers out of about $7.5 million, according to a U.S. Attorney’s Office press release.

Norma Morfin Mandujano, 47, known as Norma Morfin, pleaded guilty July 18 to conspiracy to submit false claims to the government. Three others were indicted in the same conspiracy, and two have pleaded guilty to the charges. One is still a fugitive.

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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.