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  • Stealing in plain sight: Know thy vendors…

    Posted on May 1st, 2013 admin No comments

    Miami is known for many things –natural beauty, beautiful people, great weather and South Beach. That aside, it is also the fraud capital, not only in terms of Medicare and Medicaid, but in mortgage fraud, identity theft, and potentially in the area of vendor fraud.

    Often I have found that fraud discussions and seminars seem to relate to the aforementioned. I have attended many seminars and no one focuses on what I believe is the most crucial potential for fraud that exists –approved vendors sitting in vendor master files. These are vendors you use every day, many who are legitimate and provide excellent and timely services. However, when I ask financial or supply chain managers about the number of active vendors they have or what they know about their vendors’ potential undisclosed relationships and related conflicts, I typically get the “deer in the headlights” stare or an off the cuff response.

    Once a fraudulent vendor gets into the accounts payable system, it is like a Trojan horse or computer virus that upon release could cause havoc. Losses due to misappropriations may cost companies hundreds of thousands if not millions of dollars, not to mention loss of reputation and or career for those executives who allowed this to occur. Even worse, it often occurs in plain sight, no back alley deals or brown paper bag brush bys. Everyone knows the vendor and often uses them as the “ people who come to our aid at all hours of the day or night. They are the go to people that get the job done.”

    While they may be a trustworthy loyal vendor, do you really know who they are? Do you know if they have relationships with your other vendors or employees? Do they have related companies? Have you even looked to see if the three bidders (in a three bid process you obtained to protect your company) are related and the bid is rigged? Proper and thorough up-front vetting can be used to detect and prevent these problems.

    Accordingly, organizations need a robust, vendor on-boarding process which thoroughly and completely requires vendors to submit to an in-depth review in order to identify potential conflicts with existing employees and management of the organization with whom the vendor is trying to do business.

    Pertinent data is entered by the vendor and then is sent out through various public databases; concurrently, information is obtained allowing management to make an intelligent decision regarding whether to engage the vendor.

    Not only does this improve internal controls, but also identifies conflicts before a vendor is on-boarded while highlighting other anomaly data and improper relationship issues. In some systems, the vendor pays a fee to do business with the organization; in essence, it is a zero cost proposition to the entity choosing to use it!

    Our experience shows what well intentioned and highly educated managers, in an effective if not excellent control environment, can often leave themselves and their organization vulnerable to fraudulent vendors if they don’t know what they don’t know. In this case what you don’t know can really hurt you and your organization!

    Vendors beware! Companies know thy vendors…


  • South Florida women get long sentences for ID theft.

    Posted on May 1st, 2013 admin No comments

    FORT LAUDERDALE, Fla. — Two South Florida women have been sentenced to lengthy prison terms for identity theft and tax fraud involving some 2,000 false income tax returns.

    U.S. District Judge James Cohn in Fort Lauderdale sentenced 36-year-old Alci Bonannee on Thursday to more than 26 years behind bars. The judge sentenced 40-year-old Sonyini Clay to 10 years in prison. Bonannee was convicted in January of several charges and Clay pleaded guilty.

    Prosecutors say the scheme operated from December 2010 to 2012 and involved returns submitted to the Internal Revenue Service seeking refunds of about $11 million. Of that, the IRS paid out about $3.5 million.

    Trial testimony showed most of the stolen IDs came from a hospital nurse.

    A third woman was sentenced in March to more than three years in prison.


  • Are your business computers and networks protected?

    Posted on April 16th, 2013 admin No comments

    Business identity theft has become a real problem in todays marketplace. Any business that does not take steps to protect themselves is at risk. But why are criminals targeting businesses as opposed to individual consumers? The fact is, stealing from a business is much more cost-effective than stealing from an individual consumer. So, businesses must not take this threat lightly. Every business should have certain defenses in place in order to prevent falling victim to identity theft.

    One of the most basic steps in protecting a business from identity theft is securing business computers and networks. lists 5 ways a business can do this. Here is an excerpt from their website:

    Restrict the use of your business computers to only business activities: Activities such as casual Internet surfing, use of social networks, online gaming, downloading programs, and file sharing expose your business computers to viruses, spyware, and other security risks that can jeopardize your business operations, your accounts, and the confidential information of your business, customers, and employees.

    Install and use regularly updated anti-virus / anti-spyware / Internet security software: Effective anti-virus, anti-spyware, and Internet security software programs are essential. Don’t rely on free software to protect your business. Be certain to utilize a program that actively scans and is frequently updated to keep up with new threats.

    Keep security patches and updates up-to-date: It is critically important to regularly check for and install any security updates for your computer’s operating system and internet browser program to ensure that you have the latest versions designed to protect against known software vulnerabilities. Most newer operating systems permit the user to set an automatic update schedule with a specified frequency. You should set your system to check for and install important security updates no less than weekly.

    Install and utilize a firewall on your business computers or network: A firewall is a software program or hardware device that monitors and controls external connections to your computer and/or network. A firewall helps to prevent unauthorized or unwanted external connections, and it is your first line of defense against intrusion attempts and malicious code attacks. Be certain to change the default administrative password.

    Secure your business’ wireless network: If your business uses a wireless network and it is not secured (encrypted), others can gain access to your network. Average Wi-Fi signals can extend for hundreds of feet beyond the perimeter of the building. Off the shelf wireless network devices typically do not come with their security features active, so review the product documentation to learn how to set the security features for your device, or call the manufacturer if you need assistance. WPA2 is currently the strongest wireless network encryption standard and is available on most newer wireless network devices. Be certain to change the default administrative password on the wireless router, and disable broadcasting of your SSID (Service Set Identifier).

    For more information on business identity theft prevention, visit

  • New laws urged to cut ‘epidemic’ of ID theft.

    Posted on April 16th, 2013 admin No comments

    As South Floridians rushed to file their taxes on Monday, congressional lawmakers said they would push for tougher laws to help cut down on what law enforcement officials continue to call an “epidemic” of tax-related theft in the region. U.S. Rep. Debbie Wasserman Schultz, D-Weston, said she will reintroduce legislation to enact tougher penalties against identity thieves.

    Read the full article at,0,5030102.story

  • Lawmakers renew push for legislation to prevent $5 billion tax ID fraud.

    Posted on April 16th, 2013 admin No comments

    Tax Day is no longer just a deadline for citizens to rush and file their returns. It’s now a day for members of Congress — Democrats and Republicans alike —to file legislation or announce ways to prevent an estimated $5 billion in tax-identification fraud, which is particularly virulent in Florida and especially South Florida.

    The effort by local lawmakers is nothing new, nor is the fact that the measures have died year-after-year in a do-nothing Congress.

    On Monday, Miami-area Reps. Debbie Wasserman Schultz, Joe Garcia and Ileana Ros-Lehtinen all promoted legislation to put an end to the practice. Florida Sen. Bill Nelson announced a bill last week.

    “Something needs to be done,” said Jon Simpkins, a Miami-Dade businessman who appeared with his wife, a tax-ID fraud victim, at Garcia’s press conference.

    It took the Internal Revenue Service until April 8 to supply the family their tax-refund money from last year — a week before this year’s tax-filing deadline.

    “I’m surprised they haven’t fixed this yet,” Simpkins said, detailing the delays and difficulties of just getting the IRS to do its job.

    But the delay in fixing the growing problem isn’t just a window into the problems with the IRS. It’s an example of a broken Congress that struggles to accomplish the most-basic of tasks — including an issue members of all parties agree on: Stopping fraud.

    Last year, for instance, Sen. Nelson’s crackdown bill stalled and died in the Senate because leadership said it didn’t want to deal with any new tax issues or tax reform — except for figuring out what to do with the then-expiring payroll tax cuts and the so-called Bush tax cuts.

    So even though Nelson’s bill was more of a fraud-fighting proposal, it was considered tax legislation. And it was bottled up by the advent of the so-called “fiscal cliff” and budget-sequester negotiations. The bill could face another challenge this year: the banking-and-credit industry.

    Nelson wants to make it tougher for thieves to get tax refunds electronically direct-deposited on prepaid debit cards. The cards have become increasingly common ways for regular citizens to get their returns credited to a bank account electronically. But, because the cards can be purchased by phone or internet and leave few fingerprints, scammers use them as well.

    Tax ID fraud is simple and lucrative. Thieves purchase Social Security numbers and names of people on the black market. Then they download tax forms electronically, plug in the stolen information and file false returns. They request refunds be sent to prepaid cards or, less often, by check.

    The scam is usually pulled in January and February. Most citizens file weeks or months later. If someone used their information on a tax form, the IRS then refuses to instantly pay the citizen as it did the scammer. Victims then wait for months or, in Simpkin’s case, almost a year for their refund.

    Broward Sheriff Detective Mitch Gordon warned that cracking down on debit cards won’t stop the crime entirely. But he said the cards are a good way to steal.

    “One time, we had one guy who sat at a Western Union machine for six hours just putting in debit cards, putting in debit cards,” said Gordon, who estimated the office has had 400 complaints this year.

    The Miami area is the top tax-related identity theft area in the nation, and Florida has nine of the top 10 cities for the fraud.

    South Florida accounted for 35,914 identity-theft complaints in 2012.

    “It has happened to so many people,” said Rep. Garcia. “It happened to me.”

    Garcia’s bill isn’t as sweeping as Nelson’s. It would change the law to forbid the printing of a person’s entire Social Security Number on a W-2 tax form, a major primary source for thieves who obtained them from unscrupulous employees or employers.

    Wasserman-Schultz, a Democrat like Garcia, wants to increase penalties and make federal prosecutors prioritize tax ID cases.

    Rep. Ros-Lehtinen, a Republican, is co-sponsoring both bills.

    “These bills focus much needed attention to identity theft, a problem that is clearly not a victimless crime,” Ros-Lehtinen said in a statement.

    Another Republican Rep., Mario Diaz-Balart, hasn’t studied the legislation but has held IRS officials to account in budget hearings. He tacked on an amendment to a budget bill that requires the agency to better track tax ID theft cases.

    With such bipartisan support for such an important topic, Wasserman Schultz, the Democratic National Committee chairwoman, said she hopes something will pass. “It seems like a no-brainer,” she said.

    Read more here:

  • Senate Lawmakers Reveal Plan To Stop Tax ID Fraud

    Posted on April 15th, 2013 admin No comments

    MIAMI (CBS4) – For the first time, lawmakers in the U.S. Senate unveiled how they plan to stop a growing national scam that’s stolen billions of dollars in tax money from Uncle Sam and legitimate taxpayers alike: tax refund fraud.

    It’s the latest twist on the growing identity theft problem facing consumers here and across the country.

    Critics say red tape and a massive federal agency, the IRS, delayed preventing even more losses this tax season because of conflicting marching orders from Washington lawmakers.

    As CBS Miami has reported for a while now, several years ago Congress began mandating the IRS make it easier to file tax returns from home computers.

    But what some critics say they didn’t realize was it would also make it easier for identity thieves to file phony returns too.

    On Wednesday, Senate lawmakers finally started talking about new fixes that some critics say have already taken way too long.

    “According to the Treasury Inspector General for Tax Administration, we are losing over $5 billion dollars each year to the crime and now the problem is getting worse,” said Chairman Sen. Bill Nelson.

    Facing a new filing deadline next week with hundreds of thousands of victims nationwide still waiting for last years’ tax refunds, Washington lawmakers are running out of time to put the tax ID thieves out of business.

    Formal hearings by the Senate’s Special Committee on aging also turned the spotlight on our CBS Miami investigations into the growing scam which is now in its’ 3rd year.

    “CBS, Channel 4, WFOR has really made this a cause celeb as they have tried to alert people to what is happening and these kinds of instances that our public is getting fleeced and in the process…the taxpayer is getting fleeced,” Nelson testified.

    One of South Florida’s latest victims, Weston resident Leonardo Fernandez, agrees.

    He just found out his wife’s’ tax refund was stolen after her tax return was rejected by the IRS. He says somebody else used her name and ID to file a phony return.

    “It’s terrible, they rejected because they find out somebody else fill it out, the Income Tax paper with her name,” Fernandez said.

    To keep the problem from getting even worse in the future, a series of new proposals were just filed by Senate Democrats including Bill Nelson.

    Under the plan, the IRS would be required to process legitimate refunds to victims within 90 days.

    It expands the use of special personal security numbers for taxpayers, and allows us to opt-out of electronic, computerized-filing.

    The use of credit cards for direct refund deposits would be restricted along with multiple refunds into the same bank accounts.

    A similar bill was also recently filed in the U-S House of Representatives.

    The IRS estimates losses could exceed $21 billion dollars over just the next 5 years with Florida expected to remain the top spot in the nation for tax refund scams.

    Bill sponsors hope these latest proposals can be passed quickly and signed into law.

    But they’ve also got the budget, immigration reform and gun control to work on.

    So there’s probably little chance Congress will be able to take action to fix the problem anytime soon.

    And as this years’ April 15th deadline approaches, the latest group of taxpayers are now be learning their Tax ID’s have been stolen and their tax refunds have ended up in the hands of ID thieves.

    And the long wait will begin all over again for a year or longer to get their legitimate refunds back from the IRS.

    For more information on tax ID fraud, visit these government links:


  • Come tax time, many refunds go to identity thieves.

    Posted on April 15th, 2013 admin No comments

    An epidemic of tax-related identity theft continues to plague the Internal Revenue Service despite efforts by the agency and law enforcement officials to combat the fraud, witnesses told a Senate panel Wednesday.

    “We are losing $5 billion each year to this crime, and now the problem is getting worse,” said Sen. Bill Nelson, D-Fla., the chairman of the Senate Special Committee on Aging.

    Criminals use stolen personal information to file fraudulent tax returns, usually in January, before the real taxpayers have a chance to file. By the time the victims send in their returns, it’s too late: The IRS already has mailed refund checks to the identity thieves. It can take months – even years – for the IRS to untangle the mess and send the taxpayers the refunds they’re owed.

    Nine of the 10 U.S. cities hit hardest by the scam are in Florida. The Miami metropolitan area tops the list, with 35,914 cases of tax-related identity theft reported last year and the highest per capita rate of complaints, 645 per 100,000 residents.

    Miami was followed by Atlanta, which had 12,992 complaints, Tampa, Fla., with 9,805, and Orlando, Fla., with 4,991.

    Nationwide, cases of tax-related identity theft surged 650 percent from 2008 to 2012. In 2011, thieves filed 1.5 million undetected fraudulent tax returns and received $5.2 billion in refunds, according to an audit last year by the Department of the Treasury’s inspector general.

    Witness Marcy Hossli, 57, of Lake Worth, Fla., has been a victim of identity theft through tax fraud three years in a row.

    “I should never have to go through anything like this, nor should anyone else,” Hossli said. “I feel violated. It’s hard to concentrate in work. I am stressed constantly.”

    Hossli told senators she still is waiting for her 2012 tax refund. She suffers from cancer and owes $4,000 in medical bills. “I really need the money,” she said.

    Senators expressed frustration that the IRS hasn’t been able to do a better job at catching fraud even though criminals often use the same addresses to file multiple returns.

    Republican Sen. Susan Collins of Maine said thieves used the same address in Lansing, Mich., to file 2,137 tax returns, and they received $3.3 million in refunds. An address in Chicago was used to steal $900,000 in refunds through almost 800 fraudulent returns, Collins said.

    “Criminal gangs have figured out that it’s cheaper and easier for them to steal taxpayers’ identities and hijack their refunds than it is to traffic in drugs, rob banks or fence stolen property,” Collins said.

    “The IRS has an obligation that obviously they’re not meeting,” said Sen. Claire McCaskill, D-Mo. “How in the world can there not be a system in place that the IRS could not catch that they’re sending 2,000 refunds to the same address?”

    Tax refund thieves commonly target senior citizens, as well as low-income people and students, who might not be required to file returns.

    The audit by the Treasury Department’s inspector general estimated that 76,000 senior citizens likely were victims of tax fraud identity theft in 2010, resulting in $374 million in fraudulent tax refunds.

    Victims often have their identities stolen by corrupt employees at nursing homes and hospitals, Kathryn Keneally, assistant attorney general for the Department of Justice’s tax division, said in her testimony before the committee. In other cases, criminals take names from public death lists to file tax returns, she said.

    “For the public the risk is clear,” Keneally said. Such crimes “can and do arise in any setting where the lure of fast money puts at risk personal identifying information, including at state agencies, student loan providers, the military, prisons, companies servicing Medicaid programs – the list is growing all too long.”

    Postal workers have been compromised, robbed and in one case killed in order to steal refund checks, she said.

    Prosecuting tax-refund identity theft is a national priority, she added.

    Legislation Nelson introduced this week would increase jail time and fines for people convicted of tax-related identity theft and direct the IRS to close identity theft cases within 90 days. Last year, it took an average of 196 days for the IRS to close such cases.

    The delays are unacceptable, Nelson said. He said victims of identity theft shouldn’t have to wait six months for their refunds, much less two years, as at least one woman in Parkland, Fla., had to do.

    “Many Americans rely on getting those tax refunds back so they can pay their bills,” he added.

    Nelson’s bill, co-sponsored by fellow Democratic Sens. Dianne Feinstein of California and Charles Schumer of New York, also would ensure that victims don’t have to explain their plight to different IRS employees every time they contact the agency. Instead, the IRS would give each victim a single point of contact to help track the case.

    Other provisions include restrictions that would make it harder for thieves to load stolen refunds onto prepaid cards, language that allows identity theft victims to opt out of electronic filing and prohibitions on printing Social Security numbers on Medicare ID cards and communications.


  • At Least 1,000 Current or Former Miami-Dade Students Were Victims of Tax Fraud Scheme

    Posted on April 10th, 2013 admin No comments

    A gang called the North Miami Boyz stole the identities of current and former Miami-Dade students to file at least 1,000 fraudulent tax refunds, police said.

    Authorities said they know of at least $1.6 million in returns that were filed in the identity theft and tax fraud scheme. According to an indictment, the North Miami Boyz carried out their scheme from about January 2010 to December 2011 – but police warn that the source of the students’ personal data still hasn’t been determined.

    Investigators said the group portrayed themselves as music industry moguls, flashing jewelry and big cash, but it was all a front for the tax fraud scheme using students’ personal information to get tax refunds.

    “Every single victim that we came across was either a current or former student of Miami-Dade public schools,” North Miami Beach Police Detective Craig Catlin told NBC 6. “So there is a point of compromise with the Miami-Dade public school system.”

    Lesley Dunn, a former student at Palmetto Senior High School, was one of the victims.

    “My information was exposed (through) the county schools, and my identity was stolen,” she said.

    Dunn said police came to visit her when she was a student at Palmetto Senior High. Someone had gotten a hold of her private personal data, filled out a tax return and even received a refund – all by posing as her.

    “There was a ring of thieves, I guess you would call it, associated with the Dade County school system, that had been stealing IDs or Social Security numbers,” said her mother, Debbie Dunn.

    She was just one of many teens victimized, according to police.

    “They probably did at least a thousand fraudulent refunds,” Catlin said. “But they attempted a lot more than they received.”

    Federal prosecutors took the North Miami Boyz – identified by authorities as Willman Philidor, Alland Philidor, Frantz Plantin, Frantz Desir and Arthur Blain – to court after their arrests on tax fraud charges. They entered guilty pleas and are now in federal prison.

    Catlin said the estimated 1,000 victims so far are at multiple schools. Social Security numbers were just part of the personal information obtained, and the students were given fake jobs on the tax returns so the IRS would process the refunds.

    “The IRS, as far as I know, cannot flag your name to prevent a fraudulent return from going through,” Catlin said.

    Federal agents and police said the North Miami Boyz also set up fake businesses to take in the tax refunds filed from the returns using in the students’ data.

    “They actually set up business accounts pretending to be actual businessmen and they did fraudulent returns on the computer,” Catlin said.

    Catlin said the source of the students’ personal data hasn’t been determined, and students across the public school system are still at risk of having their identities stolen too. Police are still investigating “the point of compromise from the school system,” he said.

    A Miami-Dade County Public Schools spokesman sought to reassure parents about the safety of their kids’ information.

    “Approximately two years ago the school district took very swift, decisive action to limit access to student information at all school sites,” said John Schuster, the school district’s chief communications officer, in a statement. “This highly effective, multi-pronged approach should help parents feel confident that their children’s information is secure.”

    Now, students and former students like Lesley Dunn are going to have to wait and see what impact the scheme could have on their credit and finances.

    “I don’t really know how it’s going to affect me later in life, but hopefully nothing horrible,” Dunn said.

    (original source)

  • 7 tips for avoiding ID theft during tax season.

    Posted on April 10th, 2013 admin No comments

    Identity thieves thrive at tax time, but the IRS is cracking down.

    Last-minute tax filers used to just fear that they’d owe far more money than they could afford. Oh, for the good old days.

    Now, taxpayers also worry about what happens if their tax return is automatically rejected as we near April 15 because an identity thief already filed a fake return for a fat, fraudulent refund.

    Earlier this year, IRS auditors and criminal investigators visited 197 money service businesses in 17 high-risk areas nationwide to make sure the check-cashing centers were not assisting in refund fraud when they cash tax refund checks.

    Identity crooks typically file early. The fake return means that the real taxpayer will face a much longer wait for a tax refund — and more headaches.

    Betty L. Harris has no idea how anyone got ahold of her ID to file a fake tax return in 2012. What she does know is that she sat for three hours at the IRS resolution center in downtown Detroit in early February to figure out how she’d file her return this year.

    She paid $4 for parking, drove about 25 miles one-way and left unable to e-file her return then.

    “I did everything they asked me to do,” said Harris, who lives and works in Clinton Township.

    But Harris, 57, was dealing with extra paperwork headaches a full year after crooks filed a fake tax return for 2011. Harris had to wait about eight months, until October last year, to receive her refund of about $3,000.

    Despite multiple crackdowns and convictions, the tax headaches continue. The total extent of tax refund fraud using stolen identities unknown.

    What is interesting is how many individuals were not simply sloppy with how they protected their identities. “Often times, these are innocent taxpayers who don’t even know they’ve been victimized,” said U.S. Attorney Barbara McQuade.

    Thieves may hack into computer systems or paper files at schools, employers or financial institutions. Or they can trick taxpayers on the phone into revealing too much information, according to the Government Accountability Office.

    Or thieves steal mail that has financial information out of a mailbox, or they dumpster dive for paperwork that’s been thrown out, McQuade said.

    In previous identity theft cases, McQuade recalled one scam where thieves would target cars at fitness centers, knowing that people felt safer locking their wallets in a car than taking the wallet into the gym.

    The thief in this case would copy credit card numbers and leave the cards in the wallet in the car.

    Leave a Social Security card in a wallet and the thief could copy that number, too.

    Since the start of 2013, the IRS says, it has worked with victims to resolve and close more than 200,000 cases of identity theft.

    That’s in addition to an expanded Identity Protection personal identification number (PIN) pilot program to protect victims in previous tax-related identity theft cases. The IRS said it has issued more than 770,000 identity protection PINs to victims at the start of tax filing season.

    The IRS had identified almost 642,000 incidents of identity theft as of Sept. 30, 2012, that impacted the tax administration in 2012 alone, according to the U.S. Government Accountability Office.

    One more scary number: The IRS said in fiscal 2012 the agency prevented issuance of more than $20 billion in fraudulent returns – up from $14 billion the year before.

    But another government agency estimated in July that $5.2 billion in bogus refunds could be getting through in a year. The IRS said the estimate is too high.

    Federal authorities announced an identity theft crackdown in metro Detroit in early February that included charging six people in federal court. One person was in possession of more than 50 credit cards and more than 100 pages containing names, dates of birth, Social Security numbers and addresses.

    The fraudulent returns produced fraudulent tax refunds of more than $2.3 million, according to the Detroit charges. The investigation included the IRS, the U.S. Postal Service and the Secret Service.

    Quite often, a con artist is targeting large batches of identities at once.

    There are reports in other states of criminals who have their girlfriends get jobs in medical offices to steal Social Security numbers that can be used to file false tax returns that are crafted to generate large tax refunds.

    “This is becoming a bigger and bigger tax problem,” said Adam Levin, chairman of Identity Theft 911.

    While the IRS is trying its best to crack down, Levin said, criminals are targeting fake tax refunds as a way to make money. Fake returns are designed to generate fraudulent refunds around $1,500 to $4,100 a pop.

    Where are the thieves stealing identities? The IRS shows some interesting examples:

    Frantz Auguste, an owner of a Florida dry cleaner, was sentenced to 45 months in prison on March 1. The dry cleaning business in North Miami Beach was searched in October 2012 where handwritten notes with Social Security numbers of about 100 people were found.

    “Several of these lists appeared to have originated from a local nursing home and rehabilitation center,” according to the IRS summary.

    In a case in Alabama, the IRS noted that Natacia Webster, who was sentenced to 50 months in prison and ordered to pay $113,000 in restitution had been an employee in the central records office of an Alabama state agency. She stole information from state databases, according to the IRS.

    A Chicago man, Yair Berkowitz, was sentenced to 62 months in prison and ordered to pay about $4 million in restitution. He reportedly submitted fake state and federal tax returns using identities of prisoners and the deceased from 2003 to 2009.

    Elsewhere, more than 100 U.S. Marines were hit in one tax-related scam, many of whom were serving in the same unit in Afghanistan as the ID thief.

    Another tax fraud involved a stolen warrant book from the Memphis Police Department.

    Two people in Detroit, Valerie Butler, 48, and Gary Young, 25, allegedly worked together to file at least 299 false returns, which generated refunds of more than $1 million, according to a statement by the IRS and the U.S. Attorney’s office in Detroit.

    The federal government charged that Butler and Young attempted to hide their involvement by failing to sign the returns as preparers.

    The 12-count indictment involves false tax returns filed from 2009 to 2011.

    “Butler and Young had all of the refund money deposited to bank accounts they controlled,” the statement said.

    “They split the refund money with some taxpayers, but most of the taxpayers never received any of the refund.”

    And what about the identities of children?

    How many children under the age of 14, after all, are walking around with Social Security cards in their backpacks? But questionable tax returns filed for 2010 that appeared to be filed by an identity thief showed that 2,274 children under age 14 had almost $4 million in refunds issued, according to November testimony by the Treasury Inspector General for Tax Administration before a subcommittee of the House Oversight and Government Reform Committee.

    The IRS is attempting to lock such accounts and add more filters.

    For Harris to clear up the mess, she went to the DTE Energy offices in Detroit to get proof that she lived in her house, she called Social Security offices, she went to the police station to report the ID theft, and she called the credit bureaus and the Federal Trade Commission.

    By March, she figured out a way to file by mail – not e-file.

    “It’s a lot of running around,” said Harris, who works at a nursing home.

    Seven Tips To Avoid ID Theft During Tax Season:

    1. Your identity may have been stolen if the IRS notifies you that someone has already filed a return using your information. Another bad sign: If the IRS notifies you that you were paid wages from an employer where you did not work.
    2. If you think you may be at risk for identity theft due to a stolen wallet or questionable credit activity, contact the IRS Identity Protection Specialized Unit at 800-908-4490. A taxpayer guide to ID theft is on the IRS web site
    3. Run the other way, if a tax preparer asks you to sign a blank return. Never sign a blank tax return.
    4. Skip using the Wi-Fi at a coffee spot, hotel or fast food location to file tax returns online.
    5. Some tax apps require users to take a photo of a W-2 form, but you want to make absolutely sure to delete that image afterwards, according to the Experian ProtectMyID’s list of tips for tax time.
    6. Do not leave your tax returns or any of the key paperwork in the car, on the kitchen counter or on top of the desk at home. It’s too easy for thieves to get your information.
    7. Take a look at your Social Security earnings statement each year. If that number is off, you need to connect with the IRS immediately, said Adam Levin, chairman of Identity Theft 911.

    (original source)

  • Ft. Lauderdale Man Convicted In Tax Refund Scam

    Posted on April 9th, 2013 admin No comments

    FT. LAUDERDALE (CBSMiami) – A 30-year old Ft. Lauderdale man found guilty of a identity theft tax refund scam will be sentenced this June.

    On Monday, a federal jury in Miami convicted Lee Dale on six counts of making and presenting false income tax returns for refunds to the IRS, two counts of depositing fraudulently obtain tax refund checks and two counts of aggravated identity theft.

    Prosecutors said Dale filed nearly 300 handwritten tax returns, claiming more than $2 million in refunds, between 2006 and 2009. He used stolen identities and had the checks sent to P.O. Box address.

    Although the IRS was able to prevent refund checks from being issued on most of these claims, approximately $195,000 in refund checks were mailed to Dale’s P.O. Box. Several of these checks were deposited directly into bank accounts bearing both Dale’s name and the identity theft victim’s name. Other checks were cashed at a check cashing store in Oakland Park in exchange for cash and money orders that he then deposited into his own accounts.

    Dale faces a maximum sentence of up to 10 years in prison on each count of theft of government funds, up to 5 years in prison on each count of making and presenting a false claim to the government, and two years consecutive to the other sentences on the aggravated identity theft charges.

    (original post)