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Series of tax fraud cases to be filed in federal court

February 07, 2012

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A South Florida couple is being charged with tax fraud for their alleged role in stealing millions of dollars' worth of income tax return checks that were stolen or fraudulently obtained by third parties. The defendants owned and operated American Quick Cash Depot in Oakland Park, Florida. The indictment alleges that the couple conspired by charging fees in exchange for cashing stolen or fraudulently obtained tax refund checks. The defendants appeared with their criminal defense lawyer at their arraignment in a Fort Lauderdale federal court. At the arraignment, federal investigators from the Secret Service and the Internal Revenue Service testified regarding two specific checks in the amounts of $5,415 and another for $9,391. Both checks were stolen and cashed using forged endorsements and signatures.

According to the investigators, the defendants were involved in the cashing of hundreds of checks amounting to $5.26 million. The defendants are not only charged with tax fraud, but also with aggravated identity theft. In federal court, aggravated identity theft carries a two year minimum mandatory sentence. The defendants are alleged to have conspired with third parties to steal social security numbers to take tax payers refunds prior to their filing. Federal authorities are focusing on crimes involving identity theft as the number of prosecutions have quadrupled since 2007. Tax return rackets will be specifically targeted because there are two victims involved in crime, private citizens and the federal government.

According to the special agent in charge of the IRS's criminal investigation division, the electronic filing system has a defect. The IRS fails to match tax returns to an individual's W-2 forms until long after tax filing season is over. By that time, it is too late to catch the identity theft. Until the IRS corrects the problem, fairly sophisticated people are using computers and on-line tax software to steal from citizens and the government. The number of identity theft fraud cases involving stolen or fraudulent tax returns has skyrocketed to 248,000 in 2010. The number of criminal investigations involving fraud has increased in part due to the larger number of people filing electronic returns.

While the aggravated identity theft charge the defendants are facing is serious enough, the real problem lies with the amount of loss caused to private citizens and the federal government through their actions. Tax fraud in and of itself is fairly low scoring offense under the federal sentencing guidelines. The significant portion of incarceration occurs as a result in the increased levels, not only for millions allegedly stolen, but also for the level increases the couple is likely to receive as being the managers/operators of the criminal enterprise. If the federal government's evidence is as good as they would have you believe, the defendants may have no choice but to cooperate with the federal government which would certainly significantly reduce the prison sentences each is currently facing.

Broward Couple Charged in Tax-fraud Case that Will Be the First of Many to Come, Feds Say, Miami, January 23, 2012.
Categories: Tax Fraud
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