Oh Sister, Why Fraud Thou?

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As any fan of crime shows can attest, criminals’ patterns are usually what lead to their capture. If one get-rich-quick scheme seems to be working, why not keep it going? (Trick question.) The answer can be found in the experience of three Wisconsin sisters who collectively racked up 90 felony charges of tax fraud and identity theft, according to a Fox 6 Now local Wisconsin news report.

The sisters attempted to swindle nearly $1 million in fraudulent tax refunds from the Wisconsin Department of Revenue by using stolen identities from prison inmates and others to file thousands of fraudulent income tax refund claims. But they had only collected only one quarter of that (about $200,000) before the agency caught on. Once it did, the sisters’ efforts to steal another $725,785 were thwarted, and a two-year investigation by the Criminal Investigation Section of the state’s Department of Revenue was opened.

The investigation soon discovered that the eldest sister committed the most egregious offenses (how’s that for a role model?), when she teamed up with an incarcerated Wisconsin man, who preyed on his fellow inmates soliciting help with their tax returns. After he collected their names and social security numbers, he handed them off to his friend on the outside, who filed fraudulent tax refund claims using the prisoners’ information. A tip from the prison where her accomplice was jailed led police to nab the 38-year-old woman during a traffic stop.

Another of the sisters also stole inmates’ identities, but from those in the Mississippi prison system, and used their information in fraudulent refund claims. (A case of sibling rivalry gone wrong?) Additionally, she falsified wage and tax statements and rent certificates to illegally collect homestead credits. Acting on a search warrant, investigators discovered notebooks containing information for hundreds of stolen identities, along with fingerprints, computer files and prepaid debit cards that all traces back to the phony claims she was accused of filing. (Yes, you’re supposed to keep your tax return paperwork for several years, but only if it’s legit.)

In the case of the third sister, investigators found a Huggies diaper box filled with evidence, like prepaid debit cards, invoices and bank records. (Look first where you least expect it.) They also discovered a plethora of paperwork listing personally identifiable information for hundreds of people, along with detailed notes on how she had exploited them.

The eldest sister was sentenced to 14 years in prison, followed by another 14 years of extended supervision and must jointly pay $202,520 in restitution. The other two are awaiting sentencing. These sisters might discover what a bad idea it was to commit a felony that may land them in a prison cell next to an inmate they’ve wronged.

Source: Today’s ”Fraud of the Day” is based on ”Tax fraud, identity theft scheme: One of three Milwaukee sisters headed to prison,” written by Katie DeLong and published by WITI-TV on February 9, 2016.

MILWAUKEE — One of three Milwaukee sisters charged in connection with a tax fraud and identity theft scheme has been sentenced to prison.

38-year-old Angela Staten was sentenced to serve 14 years in prison on Tuesday, February 9th for her role in the scheme. In addition to the prison time, Staten has been ordered to serve 14 years extended supervision.

Angela Staten must also jointly repay $202,520 in restitution to the Wisconsin Department of Revenue.

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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.