How Phony Inmate Tax Returns Bilk U.S. For Millions


A Florida jail guard stumbled on a tax scam in which prison inmates allegedly were attempting to bilk the government out of more than $1 million, CNN reports. Investigators say Monroe County jail inmates in Key West had been filing false tax return forms for jobs they never had as far back as 2004, and getting thousands of dollars a pop in refund checks. Using a formula that kept their refunds to amounts under $5,000 per claim, inmates thought they would fly under the radar. They did for years, passing around cheat sheets that showed line by line how to fill out complicated forms.

Officials say the scam has been going on for decades in state and federal prisons. “These guys weren’t rocket scientists. [] They didn’t just wake up and come up with this great scheme,” Monroe County Sheriff Bob Peryam said. Using names of defunct or made-up businesses as places of work and a master cheat sheet for salary and other numerical information, inmates filled out 4852 tax forms — the ones you use if your employer didn’t provide you with a W-2. More than $14 million in fraudulent refunds were issued to prisoners in 2004, according to testimony before a House subcommittee five years ago.

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