Until federal agents received a tip from a tiny credit union in Western Pennsylvania, the Internal Revenue Service was apparently unaware of what federal prosecutors are calling a “massive” fraudulent tax refund scheme that went on for years.
The five men indicted on fraud charges in the case probably believed they were safe using fake identities to open accounts at Widget Financial Credit Union in Erie, Pennsylvania. But a sharp-eyed Widget employee noticed that the credit union was receiving multiple out-of-state account applications using similar personal information, and mentioned the suspicious activity to a supervisor.
According to Credit Union Journal, that tip led to a phone call with the FBI, and the discovery of a multi-yearlong tax fraud scam involving thousands of fake tax returns filed with the stolen personal financial information of people from all over the country.
Federal officials estimate that the five men named in an indictment unsealed yesterday received some $10 million in fraudulent refunds, and had filed claims for even more, totaling up to $21 million. The indictment claims the scheme had been in place for years, from December 2005 through March of this year.
“We are making significant progress in our efforts to uncover identity fraud and protect citizens from criminals who steal their personal information and steal their money,” said David J. Hickton, U.S. Attorney for the Western District of Pennsylvania. “We have dismantled a massive stolen identity ring that involved thousands of victims and tens of millions of dollars in losses.”
IRS Criminal Investigations Division Special Agent in Charge Akeia Conner said that rooting out refund fraud is a “top priority” of the agency, and that it is one of the IRS’s “most intense challenges.”
“The use of the Internet for criminal purposes is one of the most critical challenges facing the FBI and law enforcement in general,” said Patrick Fallon, FBI Assistant Special Agent in Charge. “In order to combat Internet fraud, it is essential for law enforcement officers not only to understand and use the Internet, but also to join forces. This case illustrates the benefits of law enforcement and private industry, around the world, working together in partnership on computer crime investigations.”
Top Reads from The Fiscal Times