New Reality

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According to a recent report, there were 16.7 million victims of identity fraud in 2017. (That’s an eight percent increase over the previous year.) The new reality is that fraudsters are getting more sophisticated in their attempts to misuse their victims’ information for personal financial gain. A Linden, New Jersey man chose Stolen Identity Tax Refund (SIRF) fraud as his preferred method. He stole nearly a quarter of a million dollars from the Internal Revenue Service (IRS) by cashing tax refund checks fraudulently obtained with stolen identities.

SIRF schemes typically involve the use of personally identifiable information (PII) such as Social Security numbers and dates of birth. Perpetrators take that info and complete Form 1040 tax returns using the stolen information. They also falsify wages earned, taxes withheld and other data. (The tax returns are always configured so that a refund is generated.) The fraudsters then direct the U.S. Treasury Department to mail the refund checks to locations that they control or can access. The perpetrators then either deposit the checks into bank accounts, or they cash the check at check cashing businesses.

The Linden, New Jersey man in today’s fraud article was a former teller at a Plainfield check cashing business. He used his position to carry out the Stolen Identity Tax Refund (SIRF) fraud scheme, using the PII of unsuspecting individuals living mainly in Puerto Rico. False tax returns were filed by the former teller and other co-conspirators, and U.S. Treasury checks were sent to addresses in New Jersey they controlled. The check cashing business employee then cashed the checks for his co-conspirators. (He probably thought he’d never get caught. Well, he thought wrong.)

The 46-year-old man’s illegal acts were revealed by IRS Criminal Investigators and the Criminal Investigation Bureau of the Plainfield Police Division. He pleaded guilty to tax fraud and was sentenced to two years in prison for cashing fraudulent tax refund checks. He was also sentenced to three years of supervised release and ordered to pay $247,344 in restitution. (He should have been banned from holding any position that requires handling money.)

Even though the new reality is that fraudsters are becoming more advanced in their fraud techniques, the government is also getting better at catching criminals who try to defraud the U.S. Treasury and honest taxpayers. The former check casher from Linden, New Jersey has a new reality. He’ll be behind bars and under the watch of the justice system for the foreseeable future.

Today’s “Fraud of the Day” is based on an article entitled, Linden man gets 2-year prison term for fraudulently obtaining tax refund checks,” published on My Central Jersey on September 14, 2018.

NEWARK – A 46-year-old Linden man has been sentenced to two years in prison for his role in cashing tax refund checks fraudulently obtained with stolen identities.

Armand Joseph was sentenced Thursday in federal court, according to a news release from U.S. Attorney Craig Carpenito. He was also sentenced to three years of supervised release and ordered him to pay $247,344 in restitution.

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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.