Recently in Identity Theft Category

February 8, 2013

Feds Arrest 109 in IRS Identity Theft Crackdown

It is once again tax season, and in an effort to head off the continuing problem of tax fraud, federal authorities have taken legal action against 389 people suspected to some degree of being involved in identity theft and tax refund fraud. Criminal defense lawyers in Miami, Florida have seen an up-tick in the number of arrests and prosecutions in federal court dealing with identity theft and tax fraud. The large scale action taken by the IRS and other federal authorities has led to 109 arrests, 189 indictments and dozens of court complaints and informations. The majority of criminal activity uncovered occurred on the East Coast and in Midwest states.

Not only are individuals being targeting, but businesses as well. The IRS and other federal criminal investigators are also looking at approximately 197 money service businesses that include check cashing stores to determine if they themselves played a role in identity theft and tax return fraud. The areas of the country being scrutinized are New York, New York; Philadelphia, Pennsylvania; Atlanta, Georgia; Tampa, Florida; Miami, Florida; Chicago, Illinois; Phoenix, Arizona; Houston, Texas; San Diego, California; El Paso, Texas; Tucson, Arizona; Birmingham, Alabama; Detroit, Michigan; Oakland, California, San Francisco and San Jose, California.

The main targets of identity theft and tax return fraud of the federal authorities are the individuals and businesses that acquire individual's social security numbers and other personal information, such as names and dates of births to file fraudulent federal tax returns. The IRS commissioner has decreed, "As tax season begins this year, we want to be clear that there is a heavy price to pay for perpetrators of refund fraud and identity theft. We have aggressively stepped up our efforts to pursue and prevent refund fraud and identity theft, and we will continue to intensely focus on this area." If that is not a warning, I don't know what is. The IRS has upgraded its hardware and software to more efficiently screen tax refunds. The IRS acknowledged that the new screening process will slow the processing of legitimate tax returns and refunds, but that it is a necessary evil to prevent fraud.

To combat fraud, the IRS has also hired 3,000 employees to screen for identity theft. That number has more than doubled since 2011. The crime of identity theft is taken very seriously by the United State Attorney's offices across the country. Under the federal sentencing guidelines, aggravated identity theft carries a two year prison sentence that will tacked on the normal federal sentencving guidelines. The guidelines will be determined by the amount of loss and the number of victims involved in the identity theft. For example, someone indicted for identity theft facing a guideline sentence of 57 to 71 months will also have to contend with the additional two years that can be added to the time of imprisonment. Anyone being investigated for or having been indicted for identity theft or tax refund fraud should immediately seek assistance fro a criminal lawyer with experience in federal court defending white collar crimes.

IRS Identity Theft Crackdown Leads to 109 Arrests,, February 8, 2013.

September 4, 2012

Former NFL and College Players Enter Pleas in Federal Court

Several former NFL and college football players have been charged in federal court with crimes such as tax fraud and aggravated identity theft. Former University of Miami, New York Giant's and Oakland Raider's defensive tackle, William Joseph, pled guilty last Friday to tax related fraud and identity theft charges. Another former NFL player, Michael Bennett, and Louis Gachelin, former Miami Jackson High School and Syracuse University player, were also charged along with Joseph. All three defendants were accused of cashing a large number of fraudulently obtained tax refund checks. One of the defendants is also accused of trying to obtain a loan with falsified collateral. All three defendants entered guilty pleas with the assistance of their Miami criminal lawyers.

Joseph entered a guilty plea to theft of government money and aggravated identity theft. Joseph's sentencing hearing is scheduled for November 9, 2012. Joseph is facing a minimum two year prison sentence for the charge of aggravated identity theft. The judge imposing the penalties may sentence Joseph to consecutive time. The charge of theft will carry a sentence largely dependent on the amount of loss suffered by the federal government. Pursuant to federal statutes, the 2 year sentence can be stacked or run consecutively to the sentence imposed for the theft. Bennett, a former first round draft pick, entered a guilty plea to the charge of wire fraud. Gachelin plead guilty to the same offenses as Joseph and is looking at roughly the same sentence.

Back in May, the former football players were charged along with five other individuals with cashing $500,000 in stolen tax return checks. The defendants, either in whole or in part, forged the signatures of the individuals who actually had the right to the checks. Bennett tried to obtain a $200,000 loan using a fake bank statement showing that he had $9 million in collateral. The FBI got wind of the scheme to defraud and set up a check cashing store in an effort to catch these individuals. The sting operation led to the arrest of everyone involved. In a side note, the FBI was charging 35-40% for each check that was cashed.

Federal authorities claim that the number of identity theft related crimes are escalating in Florida and across the United States. The United States Attorney for the Southern District of Florida claims that identity theft is "America's fastest growing crime." Thousands of victims have been reported in the Miami and Tampa areas. According to the feds, the problem is being created as a result of electronic filing. The Internal Revenue Service is sending out checks prior to checking the W-2 income forms which do not arrive in their offices until after the tax filing season ends. By the time the IRS discovers the fraud, the checks have already been sent out and deposited or cashed. The number of identity theft and fraud related incidents amounted to 248,000 in 2010. According to the Department of the Treasury, 940,000 fraudulent tax returns amounting to $6.5 million have been filed.

NFL Veteran Who Played at UM Pleads Guilty to Tax-Related Fraud Charges in Miami, Palm Beach, August 31, 2012.

August 6, 2012

IRS Losing Money to Identity Theft

With mortgage fraud and Medicare fraud reportedly under control, the federal government once again has its hands full. The new fraud on the street involves identity theft and refund checks being stolen from the Internal Revenue Service (IRS). According to reports, the IRS has already lost an estimated $5 billion to individuals committing identity theft with expectations that another $21 billion may be lost over the next 5 years. While losses in no way compare to losses accrued through mortgage and Medicare fraud, the federal government is concerned. As the IRS begins to uncover the frauds that have occurred, the number of indictments involving stolen tax returns and identity theft will escalate. Criminal defense lawyers in Miami will be representing more and more clients involved with these offenses as the federal government figures out how to detect them.

The IRS is having difficulty detecting fraudulent tax refunds. According to the IRS, they discovered approximately 940,000 fraudulent returns last year preventing losses exceeding $6.5 billion. However, the IRS also reported that there could be as many as another 1.5 million fraudulent returns that went undetected. The IRS explained that the reason the fraudulent returns went undetected is because individuals are filing refunds on the behalf of deceased individuals, children and others who would not file a tax return. The IRS have specific examples of tax fraud and identity theft that they have found particularly disconcerting. For example, the IRS found that one address in Michigan was used to file 2,137 returns which in turn yielded $3.3 million in refunded money. As ususal, Florida made the list. Three addresses in Florida filed in excess of 500 returns which caused the IRS to return $1 million to each locaion.

The IRS claimed that they have difficulty in verifying returns because they attempt to process and return funds as quickly as possible. Individuals can file returns before employers and financial institutions have to submit withholding and income documents by the end of March. In sum, the IRS is offering refunds before they can verify whether the returns are being filed truthfully. The IRS made a point of saying that at present they are able to detect the majority of the identity theft tax fraud, but they are concerned of the exponential growth of the problem. The agency is actively pursuing those who commit fraud with increased assets and man-hours. The IRS along with inspector general has asked Congress to give them access to other resources that will help them more effectively fight the fraud.

In an effort to fight identity theft and tax fraud, the IRS has already begun to implement new measures. They have implemented screening filters which will not allow for refunds to be returned until a person's identity can be verified by the agency. According to the IRS, the new system has prevented $1.5 million in fraudulent returns. Another safeguard is a program that identifies social security numbers of deceased individuals. Senator Bill Nelson has approved a bill that will provide increased protections for social security numbers. Persons previously affected by identity theft will be given a special identification number to deter repeat offenses. Another billed passed by the House of Representatives is seeking to enhance the criminal penalties for identity theft and tax fraud.

IRS May Have Lost Billions to Identity Theft, Huffington, August 2, 2012.