Tax Refund Fraud
Monday, August 29, 2016

Tax Refund Fraud

You’ve filed your taxes and now you’re sitting back, waiting for that refund check. One day, an envelope from the IRS arrives.  Instead of the check that you’re expecting, you receive a letter stating that your tax refund has already been processed and the check was cashed.

It is not as uncommon as you might think.

Hundreds of UPMC employees who filed their 2013 taxes received similar notices in 2014.  An IRS investigation was immediately launched, one that led agent Robert Kickbush to Venezuela.  Arrested for the scheme was 32-year-old Yoandy Perez Llanes, a Cuban national.

Yoandy, along with three co-conspirators, stole the employee’s information, filed the fraudulent returns, and used the money to buy electronics in Florida.  These were then shipped to Venezuela for resale.

This type of tax fraud has a name – it is called a SIRF, stolen identity refund fraud. It has become so common that most U.S. Attorneys offices have a SIRF coordinator.  In fact, the U.S. House of Representatives recently passed legislation to crack down on this type of tax fraud.

The case originating in Venezuela is not isolated, though it is unusual for cases to originate in South America.  Most tax fraud occurs within the United States.

Last summer, 4 Georgians received probation or prison sentences due to a scheme to use the stolen identities of prison inmates to file tax returns in their names.  They filed some for 600 tax refunds, totaling nearly $2 million receiving nearly half a million dollars before the IRS caught on and flagged the remaining refunds as possible fraud.

Prison inmates are also perpetrators of this kind of fraud.  Prisoners use stolen Social Security numbers to file bogus returns, and in some cases, use the identities of their fellow inmates.  Once filed, the refunds are then sent to friends or family on the outside for deposit.

Legislation is pending in congress to combat this particular kind of fraud.  Awaiting approval in the Senate is a bill that would set up a central point of contact for victims of identity theft.  Another bill being considered would increase the penalties for perpetrators.  It would also phase out the use of social security numbers in the healthcare system.

The penalties for filing a fraudulent tax return can be severe.  If convicted, the criminal faces several possible punishments:

  • Up to 3 years imprisonment
  • A fine of up to $250,000 for individuals
  • Both, combined with the cost of prosecution

All of the parties mentioned above were eventually prosecuted and received prison sentences or probation.  In the case of Llanes, he was extradited from Venezuela and faced a federal grand jury.  The indictment was handed up by the grand jury on the same day that Senator Bob Casey, D-Pa, championed the bill that increased penalties and set up a central point of contact at the IRS for refund identity theft.  

Do you believe that you were the victim of this type of tax fraud? Let us help. Call the Ft. Lauderdale tax refund fraud attorneys of Zuckerman Law today for a free consultation.

500 E Broward Boulevard, suite 1710
Ft. Lauderdale, Florida 33394