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Two Plead Guilty to Stealing Identities and Filing Fraudulent Tax Returns


Tax fraud has reached an epidemic in the United States and the IRS is slow to respond to the fraud. There was a recent piece on 60 Minutes this past Sunday night related to a tax fraud scheme. The Defendant lived in Miami, Florida, and was a legitimate tax preparer.

He admitted that his boss had engaged him and taught him how to purchase (100’s) of social security numbers from medical offices at a time. South Florida is a magnet for medical fraud schemes. The number of criminal cases related to Medicare, Medicaid and prescription fraud billing from South Florida this year is staggering.

The tax preparer during the course of the interview, admitted that he would sit at home and create a fraudulent tax return and W-2 for the worker. The tax return would generally request a refund of $4,000-$5,000 for each fraudulent return. The Defendant in the 60 minutes piece estimated that he could do 10 returns a day.

Not a bad living of $45,000 a day, except that it is was illegal. At the end of the show it was revealed that the Defendant received 40 months in federal prison. Also, he will have to pay restitution to the United States, which more than likely will never be repaid. The loser in the case is “John-Q-Public”.

The IRS would then mail a check, or put money on a prepaid Visa card for the tax payer. Keep in mind, that the tax preparer is not real and the identity is stolen. The IRS according to federal statute is required to send out a refund within 6 weeks of the return. The IRS and the Department of Justice admitted that very few if not most of the returns are never audited.

The most frustrating part is that the citizen that had his social security number stolen, files a legitimate tax return and then is told by the IRS that his tax return has already been filed for the year. It is not until the legitimate return is filed that the IRS or the victim becomes aware of the fraud.

This brings us to the case at hand. Two individuals plead guilty to conspiracy to defraud the U.S. and commit theft of public money and mail fraud. According to court documents, the two conspired with each other and others to file false federal income tax returns using stolen identities including false claims for tax refunds. The defendants and others used individuals’ names and social security numbers in order to prepare false tax returns.

They directed the Internal Revenue Service (IRS) to mail refund checks to addresses in Louisiana, including to post office boxes that were opened by co-conspirators. The two would falsely endorse and deposit the refund checks into bank accounts under their control. The proceeds of the refund checks would then be divided among the co-conspirators.

The pair are scheduled to be sentenced in U.S. District Court in the Eastern District of Louisiana on Sept. 22 and each face a statutory maximum sentence of five years in prison and a fine of $250,000 for the conspiracy count.

If you are being investigated by the IRS or the Department of Justice, please feel free to call for a representation.


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