The Millionaires Club


It’s not easy to start a business. There’s funding to worry about, and payroll to be made. There’s location decisions – and, of course, all of the complications of the tax code. Some people fail and some succeed. If the allegations are true, the defendant in today’s Fraud of the Day had a knack for it; allegedly, she set up not one, but as many as 80 separate shell companies to collect unemployment benefits. Total cost to the taxpayer: $8.7 million.

The story comes from the Southtown Star in Illinois, and it details the exploits of an ambitious tax preparation business on Chicago’s South Side that, frustrated by the low margins from preparing legitimate tax returns, instead may have turned to far more lucrative fraudulent returns. The alleged scheme crossed three states – Illinois, Indiana and Minnesota – and involved 15 people who registered 80 fictitious employers with unemployment insurance agencies. (The old multi-state fraud. If true, I bet she used a lot of the same identities in each state.)

In addition to defrauding state agencies, the 60-count, 15-person indictment also alleges that the group falsely claimed upwards of $1 million in federal tax refunds. (Possible tax fraud, too? Wonder if there are any EBT cards in there?? Much of the money allegedly was obtained by using information from customers of the legitimate tax preparation business – which is yet another reminder to be vigilant whenever asked to provide personal information – not only about why the information is required, but who is asking for it. Because no matter how many businesses an

Source: Today’s ”Fraud of the Day” is based on an article entitled, ”Country Club Hills woman faces fraud charges” by Mike Nolan of The Southtown Star, April 18, 2012.

A Country Club Hills woman has been charged along with 14 other people in a scheme that allegedly defrauded state unemployment insurance agencies in Illinois and two other states of more than $8.7 million, the U.S. attorney’s office in Chicago said Wednesday.

Jacqueline Kennedy, who owned tax preparation businesses on Chicago’s South Side, was charged with 14 counts of mail and wire fraud, six counts of filing false claims for tax refunds and one count of aggravated identity theft, the U.S. attorney’s office said in a news release.

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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.