Examples of Identity Theft Schemes - Fiscal Year 2014
The following examples of identity theft schemes are written from public record documents on file in the courts within the judicial district where the cases were prosecuted.
South Carolina Woman Sentenced for Tax Fraud
On November 22, 2013, in Columbia, S.C., Penny Maria Smith, aka Penny Maria Gardner, aka Penny Gardner Faile, of Kershaw, S.C. was sentenced to 30 months in prison, three years of supervised release and ordered to pay $82,665 in restitution. Smith pleaded guilty to fraud related to identification documents. According to evidence presented at the change of plea hearing, Smith, a tax preparer, filed false tax returns using others’ identifying information without their authority. Some of the victims had employed Smith as their tax preparer to file their taxes in previous years. However, Smith used their information or their dependents’ identifying information during additional tax years without their permission. Smith admitted to filing 86 false claims with the IRS, totaling $82,665 in loss.
Florida Man Sentenced for Tax Fraud
On November 20, 2013, in Panama City, Fla., Anthony Q. Atkinson was sentenced to 37 months in prison, three years of supervised release and ordered to pay $23,496 in restitution to the IRS. According to court documents, Atkinson and others were involved in a tax scheme whereby they conspired to file false federal income tax returns with the IRS claiming refunds to which the defendants knew they were not entitled. As part of the scheme, conspirators would provide the personal identifying information of other individuals to Atkinson, who would then file false tax returns for each of those individuals. The returns transmitted in this scheme had notable similarities, including fabricated taxable interest income and names of financial institutions, false amounts of Social Security income and fabricated amounts of tax withholdings.
Florida Woman Sentenced for Tax Refund Fraud
On November 19, 2013, in Tampa, Fla., Porscha Williams was sentenced to 48 months in prison and ordered to pay a $9,116 money judgment, the proceeds of the charged criminal conduct. Williams was found guilty in September 2013 to theft of government property and aggravated identity theft. According to court documents, Williams engaged in stolen identity tax refund fraud from as early as March 2011. She was responsible for the filing of more than 30 fraudulent tax returns claiming refunds totaling in excess of $175,000. Porscha Williams’ sister, Nikia Williams, was sentenced in June 2013 to 66 months in prison for her role in the scheme. Another co-defendant, Quincy Wimberly, is currently awaiting sentencing.
New Jersey Man Sentenced in Tax Refund Fraud Scheme
On November 15, 2013, in Newark, N.J., Manuel Rodriguez, of New Brunswick, N.J., was sentenced to 48 months in prison, three years of supervised release and ordered to pay $5.2 million in restitution. Rodriguez previously pleaded guilty to an information charging him with conspiracy to defraud the United States, theft of government property and aggravated identity theft. According to court documents, Rodriguez participated in a scheme that caused more than 8,000 fraudulent United States income tax returns to be filed claiming more than $65 million in tax refunds. Rodriguez and others obtained personal identifiers, such as dates of birth and social security numbers, belonging to Puerto Rican citizens. They used those identifiers to create fraudulent 1040 forms, which falsely reported wages purportedly earned by the “taxpayers” and taxes purportedly withheld, to create the appearance that the “taxpayers” were entitled to tax refunds.
Alabama Man Sentenced for Role in Identity Theft and Tax Refund Scheme
On November 14, 2013, in Montgomery, Ala., Kevin Jackson was sentenced to 102 months in prison, three years of supervised release and ordered to pay $150,840 in restitution. Jackson had previously pleaded guilty to access device fraud and aggravated identity theft. According to court documents, Jackson possessed a storage locker in which law enforcement authorities found a computer, three cellular telephones, at least 500 names and Social Security numbers of identity theft victims and at least 70 prepaid debit cards, all tied to a scheme to obtain fraudulent federal tax refunds by causing federal tax returns to be filed in the names of stolen identities.
Leader of Massive Tax Refund Fraud Scheme Sentenced
On November 13, 2013, in New York, N.Y., Melvin Duarte was sentenced to 120 months in prison, three years of supervised release and ordered to forfeit $15 million. In June 2013, Duarte pleaded guilty to one count of conspiracy to defraud the United States, one count of conspiracy to steal mail and one count of mail theft. According to court documents, Duarte participated in a massive tax and mail theft scheme. As part of the scheme, co-conspirators operating out of the Dominican Republic and other places electronically filed thousands of fraudulent federal tax returns, seeking tens of millions of dollars in tax refunds. The fraudulent returns were filed using social security numbers and other identifying information stolen from residents of Puerto Rico. Each of the tax returns at issue falsely represented that the taxpayer resided at an address in the Bronx, N.Y., where the refund check was to be sent. The checks were then stolen by letter carriers assigned to the mail routes where the checks were sent who had been recruited beforehand to participate in the scheme. The letter carriers participating in the scheme were paid a kickback for each check they stole. The letter carriers passed the checks on to other co-conspirators, who cashed them at various banks and check-cashing businesses located in the U.S. and the Dominican Republic.
Texas Woman Sentenced for Identity Theft and Wire Fraud Scheme
On November 12, 2013, in Sherman, Texas, Lynetta Mae Washington, of Denton, Texas, was sentenced to 63 months in prison, five years of supervised release and ordered to pay $407,448 restitution. Washington pleaded guilty on November 28, 2012 to two counts of making false claims, one count of misuse of a Social Security Number and one count of wire fraud. According to court documents, in January 2007, Washington fraudulently assumed the identities of her father-in-law and deceased mother to present the IRS with two falsified 2006 Income Tax Returns in which she claimed a total of $5,730 in tax refunds. Washington also knowingly submitted a written Renewal Application for Loan Officer License with the Texas Department of Savings and Mortgage Lending in which she fraudulently claimed her mother’s Social Security Number as hers in order for her license to be renewed. Furthermore, Washington admitted that while working as a loan officer on behalf of one or more mortgage companies from 2006 to 2009, she collected a fee for providing fictitious employment and income information on a mortgage application in order to secure the loan.
Dallas Man Sentenced for Conspiracy to File False Claims for Refunds
On November 12, 2013, in Sherman, Texas, Moses Mukuka, of Dallas, was sentenced to 46 months in prison, three years of supervised release and ordered to pay $1,463,116 in restitution. In addition, Mukuka will be deported after he completes his prison term and supervised release. According to court documents, Mukuka entered into one conspiracy with another individual advertising himself as an accounting student, which he was not, and offered to do income tax returns for a $10 fee. Mukuka received paperwork from students to prepare their taxes and then sent the information out-of-state to the other individual to prepare the tax returns. The tax returns were submitted to the IRS with false information, including the number of dependents, claims as head-of-household, and other fictitious entries designed to increase the refund amount. Mukuka then distributed a small portion of the actual refund to the taxpayer, representing it was the entire refund. Mukuka admitted that he was aware the tax returns were false. In the other conspiracy, Mukuka and his co-conspirators acquired the personal identification information of others, including their Electronic Filing Identification Numbers, and they used that information to file false tax refund claims with the IRS.
Tax Credit Refund Conspirators Sentenced
On November 7, 2013, in Philadelphia, Pa., Paul Rawls, of Philadelphia, was sentenced to 51 months in prison. Rawls pleaded guilty on June 25, 2013 to conspiracy and filing a false claim. On October 9, 2013, Jonathan Brownlee, a tax preparer, was sentenced to 24 months in prison. Rawls and Brownlee were also ordered to pay $197,385 in restitution. According to court documents, Rawls and Brownlee conspired with two others in a tax fraud scheme that sought to bilk the government of over $600,000. The two remaining conspirators await sentencing. The scheme involved filing false tax claims by obtaining and using the personal identifying information of several individuals, including their social security numbers, sometimes under false pretenses. The conspirators used the information to prepare and file bogus tax returns claiming fraudulent refunds and directed the refunds to be deposited into bank accounts that the conspirators controlled. The tax returns fraudulently reported that the individuals for whom they prepared the returns were entitled to receive a $7,500 refundable tax credit under the Housing and Economic Recovery Act of 2008. The returns were false because those individuals had not purchased new homes and thus were not eligible to receive the refundable tax credit. Some of the individuals, in whose name the returns had been prepared and filed, were not aware that the conspirators used their social security numbers for the purpose of filing the false returns.
Debt Collection Employee and Son-in-Law Sentenced for Identity Theft Tax Scheme
On November 1, 2013, in Montgomery, Ala., Quentin Collick, of Montgomery, Ala., and Deatrice Williams, of Duluth, Ga., were sentenced to 85 and 51 months in prison, respectively. Collick and Williams were convicted by a jury of conspiring to file false claims, wire fraud, and aggravated identity theft. Collick was also convicted of three counts of theft of public funds. Corey Thompson, a co-conspirator, was previously sentenced to 30 months in prison. Based on evidence introduced at trial and court documents, Williams worked for a debt collection company located in Norcross, Ga. As an employee, Williams had access to a database that stored names, social security numbers and dates of birth of individuals who owed medical debts. Williams stole the identities of a number of these individuals and provided the stolen information to Collick, her son-in-law. Collick and Thompson used the stolen identities to file false tax returns and fraudulently claim tax refunds. In 2011 and 2012, Thompson worked as an independent contractor for a cable company installing cable and Internet access for customers. To conceal the filing of the false tax returns, Thompson used his specialized knowledge and equipment to shut down and hijack his customers’ Internet service, and along with Collick, filed false tax returns using the customers’ Internet access, making it appear as if the false tax returns were being filed by the customers. Thompson and Collick then directed the tax refunds to be placed on pre-paid debit cards. However, some of those cards were intercepted by the United States Postal Service.
Former United States Postal Service Mail Carrier Sentenced for Role in Stolen Identity Refund Fraud Scheme
On October 31, 2013, in Montgomery, Ala., Vernon Harrison was sentenced to 111 months in prison, three years of supervised release and ordered to pay $82,791 in restitution. Harrison was convicted on July 3, 2013, following a jury trial, of conspiracy to file false claims, mail fraud, aggravated identity theft and embezzlement from the mail. According to the evidence presented at the trial, Harrison was a United States Postal Service mail carrier who was recruited to join a stolen identity refund fraud conspiracy. Members of the conspiracy used stolen identities to file false tax returns, which claimed fraudulent tax refunds. The returns were filed from various locations, including houses and hotels around Montgomery and Birmingham, Ala. The tax refunds were placed on debit cards that were mailed to addresses along Harrison’s postal route. Harrison stole the debit cards from the mail and provided them to a co-conspirator in exchange for cash. During this period Harrison stole over 100 debit cards from the mail for his co-conspirators.
Former NFL Player Sentenced for Federal Tax Fraud Conspiracy
On October 29, 2013, in Orlando, Fla., Freddie L. Mitchell II was sentenced to 37 months in prison and three years of supervised release. Mitchell pleaded guilty on March 8, 2013 to conspiracy to file a false tax claim with the government. According to court documents, on November 30, 2009, the IRS determined that a fraudulent 2008 Form 1040 claiming a $1,968,288 tax refund had been filed in the name of a professional athlete. Agents soon learned that the professional athlete had been introduced, by Mitchell, to former IRS employee Jamie Russ-Walls. Russ-Walls indicated that she and her husband, Richard Walls, worked in the tax preparation business and could get additional money back from the IRS because of "grey areas" in his tax returns. The athlete eventually made a $100,000 down payment to Mitchell towards the tax preparation fee which Mitchell split with Russ-Walls and Walls. They then electronically submitted a fraudulent 2008 Form 1040, in athlete's name, to the IRS without his knowledge. The form included false business losses totaling $5,367,775, resulting in a fraudulent refund of $1,968,288. The athlete never had any involvement in these businesses and never had provided the information on the tax schedule to Mitchell, Russ-Walls, or Walls. The false return also included paperwork asking the IRS to directly deposit the refund into the bank accounts of Mitchell and Russ-Walls. The athlete subsequently learned of the fraudulent activity when the IRS rejected his regular tax return that he filed. During the investigation, it was discovered that five other false 2009 returns totaling $2,264,005 had been submitted by Mitchell, Russ-Walls and Walls. Each of these claims had been accompanied by false W-2 forms showing wages in the millions of dollars from Chameleon Enterprises, LLC. Mitchell had incorporated this business in 2003, listed himself as the manager, and opened a mailbox in Kathleen, Florida to receive correspondence. When contacted by the IRS about the wages allegedly paid to these five individuals, Mitchell falsely verified their employment and income. Records checks later revealed that Chameleon actually had been dissolved as a corporation by the State of Florida in 2007 and therefore did not pay any wages in 2009. On February 1, 2013, Jamie Russ-Walls was sentenced to five years of probation. On February 14, 2013, Richard Walls was sentenced to 37 months in federal prison.
Defendant Sentenced in $14 Million Identity Theft Tax Refund Fraud Scheme
On October 25, 2013, in Miami, Fla., Serge St-Vil was sentenced to 96 months in prison, three years of supervised release and ordered to forfeit $7 million. St-Vil previously pleaded guilty to wire fraud and aggravated identity theft. According to court documents, in 2010, St-Vil, Muller Pierre and Finshley Fanor were involved in a scheme to file fraudulent and unauthorized tax returns seeking refunds. During the course of the scheme, there were over 5,000 fraudulent returns submitted to the IRS seeking over $14 million in refunds. Nearly all of these returns were submitted in the names of deceased persons. St-Vil was responsible for the filing of thousands of these returns using an Electronic Filing Identification Number obtained by Fanor. On June 26, 2013, Muller Pierre, of North Miami Beach, was sentenced to 57 months in prison. On May 22, 2013, Finshley Fanor, of Lauderhill, was sentenced to two years of probation.
Former Alabama Tax Return Preparer Sentenced for Tax Fraud and Aggravated Identity Theft
On October 24, 2013, in Montgomery, Ala., Bridgett Terry-Sankey was sentenced to 24 months and one day in prison. Terry-Sankey pleaded guilty on June 18, 2013, to one count of filing a false claim and one count of aggravated identity theft. According to court documents, Terry-Sankey worked as a tax preparer at a professional tax business in Montgomery. She prepared and electronically filed four false 2010 federal income tax returns using the means of identification of actual individuals without their knowledge or permission. Terry-Sankey then caused the false refunds to be deposited onto debit cards or issued as refund anticipation loans. She used the false refunds for her personal benefit.
Florida Man Sentenced for Tax Fraud and Identity Theft
On October 18, 2013, in Tallahassee, Fla., Jamal Ismail Raddar was sentenced to 60 months in prison, three years of supervised release and ordered to pay $1,223,140 in restitution. Raddar pleaded guilty on July 25, 2013 to conspiracy, conversion of government property and aggravated identity theft. According to court documents, between January 1, 2011 and March 8, 2013, Raddar helped negotiate more than one million dollars in stolen and fraudulently obtained United States Treasury checks. Raddar was a link in a chain of intermediaries between the persons who obtained the checks and those who ultimately cashed them. Evidence showed that he spent and held over $290,000 in cash in a twelve-month period when he was not otherwise employed. The case involved at least $1,085,467 in proceeds from fraudulent federal income tax returns, $134,610 in stolen Social Security checks, and $3,063 in stolen VA pension checks. The conversions occurred when Raddar asserted ownership of particular checks by attempting to negotiate them. He used the identities of real people in these crimes.
Two Sentenced for Identity Theft and Tax Conspiracy
On October 10, 2013, in Columbia, S.C., Yeedser D. Palacios and Wandy A. Fabre, both of Miami, Fla., were sentenced for conspiracy to defraud the United States and aggravated identity theft. Palacios and Fabre were sentenced to 75 months and 54 months in prison, respectively. Both were also ordered to pay over $91,000 in restitution. Evidence presented at the change of plea hearing established that Fabre, Palacios, and Charles Law traveled to South Carolina for the purpose of filing fraudulent income tax returns and receiving bogus refunds. The three men rented a local hotel room and waited while accomplices in Florida sent them the names, dates of birth, and social security numbers that had been stolen. The trio used this information to file tax returns and directed that the refunds be sent to various addresses. The defendants routinely checked mail boxes for debit cards containing the refund amount. The investigation revealed that the trio filed over 60 fraudulent returns. The average amount of refund claimed was between $5000 and $7000. Charles Law pleaded guilty and awaits sentencing.
Pennsylvania Man Sentenced for Tax Credit Refund Scheme
On October 9, 2013, in Philadelphia, Pa., Jonathan Brownlee, was sentenced to 24 months in prison, three years of supervised release and ordered to pay $197,385 in restitution to the IRS. Brownlee pleaded guilty to conspiracy to file false claims against the United States and aiding and abetting in the filing of false claims. According to the superseding indictment, Brownlee and his co-conspirators obtained the personal identifying information of several individuals, including their social security numbers, sometimes under false pretenses, which they then used to prepare bogus tax returns. Along with preparing and filing the bogus returns, Brownlee and his co-conspirators opened accounts at several banks for the purpose of having the refund checks electronically deposited into the accounts. The tax returns fraudulently reported that the individuals, for whom Brownlee had prepared the returns, were entitled to receive a $7,500 refundable tax credit under the Housing and Economic Recovery Act of 2008. The returns were false because the individuals had not purchased new homes and thus were not eligible to apply for the refundable tax credit. Most of the individuals, in whose name the returns had been prepared and filed, were not aware that Brownlee and his co-conspirators had used their social security numbers for the purpose of filing the false returns.