Entrepreneurial Fraud

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42189930 - closeup of smiling woman realtor giving key of new apartment to client. female house agent sitting at the desk with house miniature and plan.

Small businesses are usually good for the community because they create job opportunities, while generating tax revenue that ultimately benefits local residents. A story published on NOLA.com tells about a mother and daughter team of entrepreneurs, who operated a Louisiana tax preparation business with the intent to bilk the Internal Revenue Service (IRS). (This is not exactly beneficial to the local community or their victims.)

The story states that over about a six-month period of time, the 46-year-old mother and her 29-year-old daughter used recruiters to refer clients to their office under the guise of securing the $7,500 federal first-time homebuyer credit. (Who wouldn’t like to receive a $7,500 tax break?)

The mother-daughter team interviewed the clients to capture their personal information, which was then used to file more than 300 false tax returns claiming earned income tax credits and first-time homebuyer tax credits. (Did I mention that they also listed false dependents?) The article claims that the bogus tax returns yielded from between $5,200 to more than $10,000 each. In total, more than $1.8 million in fraudulent refunds were paid out.

Court documents state that the woman relied on her brother to open accounts at two local banks. He was also directed to withdraw hundreds of thousands of dollars in cash, which was used by his sister to make personal purchases and support a gambling habit.

Both the mother and the daughter pleaded guilty to a conspiracy to defraud the U.S. government. They are each facing a 10-year prison sentence, restitution and a $250,000 fine. (This is the maximum punishment allowed by federal law.)

According to the article, the small business owner had previous experience with fraud. She had intentionally hidden her identification from the IRS during the investigation because her electronic filing identification number already had been suspended for running another fraudulent tax scheme through a different business she had created. (Perhaps she told herself that if at first you don’t succeed try again with another fraudulent business.)

It looks like this fraudster is not very successful at running legitimate companies and her career as a tax preparer is most likely over for good. (Finally, a benefit to be realized by the local community.)

Source: Today’s ”Fraud of the Day” is based on an article titled, ”Destrehan Mother, Daughter Plead Guilty to $1.8 Million Fraud Involving Tax Returns,” written by Littice Bacon-Blood and published by NOLA.com on June 18, 2014.

A Destrehan mother and daughter, accused of filing more than $1.8 million worth of fraudulent tax returns at their tax preparation company during a six-month period in 2009, have pleaded guilty to conspiracy to defraud the U.S. government. Each faces a maximum of 10 years in prison, restitution and a $250,000 fine, although maximum punishments are rare in federal court.

The U.S. attorney’s office said Cathy Vinnett, 46, pleaded guilty on Monday, the day her trial was scheduled to start, before U.S. District Court Judge Ivan Lemelle. Her daughter, 29-year-old Lashanda Vinnett, pleaded guilty to the same charge on Friday.

 

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Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.