Tax Refund Fraud Scheme Shut Down After US Authorities Arrest 14 Suspects

On September 19, authorities arrested a number of 14 individuals suspected of participating in one of the largest and longest stolen identity tax refund fraud schemes the US has ever witnessed. It’s believed that the fraudsters attempted to steal around $65 million (52 million EUR).

According to the US Attorney’s Office of the District of New Jersey, the individuals caused damages of $11.3 million (9 million EUR). They’re now being charged with conspiracy to defraud the state and theft of government property.

“The defendants in this case allegedly tried to steal $65 million using stolen identities to obtain refunds to which they were not entitled,” explained U.S. Attorney Fishman.

“No matter how sophisticated, these crimes are pure theft. They victimize all members of the public, especially those whose identities are stolen.”

The US Postal Inspection Service – whose representatives also participated in dismantling the criminal ring – says that these types of schemes have been around for many years.

“The Postal Inspection Service noted a significant increase in tax refund fraud schemes approximately three years ago and formed the New Jersey Financial Crimes Task Force in an effort to identify, disrupt and dismantle organized groups engaged in these schemes,” noted Inspector in Charge Phillip Bartlett.

The suspects – aged between 27 and 73 – used the money they fraudulently earned to purchase houses, expensive cars, vacations and other luxury items.

To make all that money, the perpetrators would steal the social security numbers, dates of birth and other sensitive details of unsuspecting individuals, many of which reside in Puerto Rico. The fraudulently obtained information would then be utilized to fill Individual Income Tax Returns.

The tax return checks issued by the US Treasury Department were intercepted by the conspirators, often by bribing mail carriers.

If found guilty, each of the suspects could be sentenced to a maximum of 15 years in prison and forced to pay a fine of up to $500,000 (400,000 EUR).