“If They Approve it, Do You Think it’s Illegal?”

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closeup of a computer laptop with a tax form on screen, concept of online tax filing (3d render)

Fraudsters have good questions as did Ian Hosang, May 8, 2020, after he was arrested and arraigned in Brooklyn Supreme Court for grand larceny, identity theft and scheming to defraud the IRS, by establishing fake non-profits with legitimate-sounding names, like “American Cancer Society for Children” and “United Way of New York.”

“If you file something with an agency,” Hosang asked, “and they approve it, do you think it’s illegal?

Starting in 2014, Hosang, 63, of Staten Island, 2021 allegedly filed paperwork with secretaries of state throughout the country despite the real ACS reporting the suspicious applications to authorities, and the charities claiming to be located where they clearly were not. Authorities said Hosang had no affiliation with the actual American Cancer Society nor with United Way and took advantage of a fast-track process by the IRS that rejects only one in 2,400 applications.

The district attorney said Hosang used a Brooklyn, NY company to create and file most of the paperwork, stealing the identity of a Brooklyn resident to carry out the alleged scheme. Every single one of Hosang’s “charity” applications had been approved by the IRS — 76 in total.

Hosang advertised the charities and solicited donations on multiple websites, allege authorities. One site claimed, “Thanks to our volunteers, our ‘angels on earth,’ we have been able to keep organizational costs low while using most of your generous contributions to benefit kids and their families.” Maybe he was referring to the IRS as the “angels on earth?”

The only one who benefited from these donations (about $152,000) was Hosang, who allegedly used the donations to make mortgage payments, pay credit card bills and make liquor store runs, authorities said.

Mr. Hosang’s lawyer said he is in plea negotiations with prosecutors. Hosang apologized and “intends to make full restitution.”

Today’s “Fraud of the Day” is based on an article posted by New York Times, on July 3, 2022, “76 fake charities shared a mailbox. The IRS kept approving more,” by David A. Fahrenthold, Troy Closson and Julie Tate

The “American Cancer Society of Michigan,” state authorities say, was a fake charity. And not even a good fake. It was not in Michigan, for one thing. When the group applied to the IRS to become a tax-exempt nonprofit in 2020, it listed its address as a rented mailbox on Staten Island in New York City. It was not the American Cancer Society, either: In fact, the real American Cancer Society had already warned the IRS that the leader of the sound-alike group, Ian Hosang, was running a fraud.

The IRS approved the group anyway. Soon after, it also approved another operation run by Hosang: “the United Way of Ohio,” which was also registered to the Staten Island address.

 

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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.