Lucrative Fraud

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To file a fake tax return, personal identification information including a Social Security number, date of birth, bank account number and address are needed. (It also helps to have an internet connection as well.) With the press of a button, it’s just a matter of days before a fraudulent refund can be available via a debit card. (Electronic refunds tend to make it easier to commit fraud because the recipient’s identity does not have to be verified with a photo ID.) An article published in the St. Louis Post-Dispatch tells about two fraudsters who sought more than $2.25 million in refunds by filing fraudulent tax returns.

The story states that the two men stole personal information from more than 400 victims. They used that data to submit approximately 450 fraudulent tax returns. (Fraudsters usually fill in the blanks with fictional information regarding employment, income and dependents.

The refund can be deposited into bank accounts that are opened online in the victim’s name without their knowledge. In this case, the two men had the multiple refunds sent to a prepaid, internet-based debit account. Either the two fraudsters or other co-conspirators withdrew cash from the debit cards that were issued for the tax refunds. The men received $490,000 for their illegal efforts.

The two 25-year-old men pleaded guilty to aggravated identity theft. One of the men also pleaded guilty to conspiracy to steal government funds. They both face at least two years in jail, while one may get seven years in prison. Further research revealed that a former schoolmate of one of the defendants also pleaded guilty to a misdemeanor theft charge related to the case, was sentenced to five years of probation and ordered to repay $8,400.

Tax refund fraud is a popular choice for many criminals because there is less risk of bodily harm than other crimes. (Criminals are less likely to die from tax refund fraud than drug dealing.) It’s also very lucrative as this story attests. However, the government doesn’t like it when criminals try to steal from its hard-working, tax-paying citizens. Let’s hope that the final decision handed down on prison time will help convince these men to pursue an honest living when they get out.

Source: Today’s ”Fraud of the Day” is based on an article titled, ”Two Florida Men Plead Guilty to Tax Fraud,” written by Robert Patrick and published by the St. Louis Post-Dispatch on December 1, 2014.

ST. LOUIS – Two men from Miami pleaded guilty in U.S. District Court in St. Louis to federal charges and admitted stealing identities to commit tax fraud, prosecutors said.

Both Montrail Austin, 25, and Terrell Langston, 25, pleaded guilty to one count of aggravated identity theft. Langston also pleaded guilty to conspiracy to steal government funds.

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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.