A person uses stolen identity information to file a false tax return and received a refund intended for another. The individual and their crew are caught and face prosecution. This is the story of how that happens.
Fraudsters regularly target refunds due to others from the Internal Revenue Service (IRS). The IRS routinely puts out media to warn consumers of new schemes and scams that may endanger their refund and their personal contact information.
While you have likely seen these warnings, have you ever wondered what that type of scam looks like from the inside?
In June 2020, an Oregon man pled guilty to filing fraudulent tax returns. The offense is pretty common, and this individual worked with a team to carry out the scam. Here are the elements:
- Information: In order to perpetrate tax fraud, you need the credible personal contact information of unsuspecting, legitimate tax payers. That information takes the form of social security numbers, names, and birth dates. In this case, players had access to the personal contact information from inmates in a state prison. In other instances, information is siphoned from health, employee, or credit databases.
- Accounts and mailing addresses: Once personal identifying information is stolen, it’s off to the races. Fake bank accounts based on mailing addresses controlled by the team are created in order to collect checks forwarded by the IRS. In this case, the Oregon player divided the refund money among the team.
- End game: If a tax crime has enough breadth, those involved may move the money to an offshore tax haven and then personally disappear from the region as well, moving on to greener pastures when the money runs out. Oftentimes though, smaller players remain local, plying the scam until their luck runs out. In this matter, the individual pled guilty and faces sentencing in September of this year.
There are at least two take-home points from this story. One is to safeguard your personal contact information. It is easy to see why hackers work hard to exfiltrate personal information from a variety of databases. The sale of personal information is lucrative for perpetrating tax and other crimes.
The second point is that fraudsters are usually caught at some point. Sometimes a guilty plea can slightly lessen the severity of consequences, but life and livelihood are still seriously impacted. If you, or someone you know, are involved in a high-level tax fraud, or potentially facing criminal tax charge—speak with a tax attorney focused on criminal tax defense.
Get guidance from an experienced legal team
Located in Cleveland and Chicago, the criminal tax lawyers at Robert J. Fedor, Esq., LLC respond to your concerns about payroll tax issues, allegations of tax fraud or other tax controversy. When you need skilled tax advice locally or abroad, call 800-579-0997 or contact us.