Fake Tax Returns Yielding Millions In Easy Fraud Profits


Phony tax returns are a fast-spreading form of fraud so simple and lucrative that some violent criminals have traded their guns for laptops, says the New York Times. With ledgers of stolen identity information–Social Security numbers and their corresponding birth dates and names–criminals have electronically filed thousands of false tax returns with made-up numbers and have obtained hundreds of millions of dollars in wrongful refunds. “This is like a tsunami of fraud,” said U.S. Attorney Wilfredo Ferrer of Miami.

Criminals, some of them former drug dealers, outwit the Internal Revenue Service by filing a return before the legitimate taxpayer files. Then the criminals get the refund in a convenient but hard-to-trace prepaid debit card, typically sent to them by a bank or a tax software company, which downloads the amount approved by the IRS. The swindlers often provide addresses for vacant houses, even buying mailboxes for them, and then collect the refunds there. Postal workers have been harassed, robbed and, in one case, murdered as they have traveled with mail trucks full of debit cards and master keys to mailboxes.

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