Miami is Bringing the Heat


If you’re a basketball fan, you’ve probably heard the phrase: ”Miami is bringing the heat.’? Or, maybe you’ve heard the phrase on the weather news during the dead of summer. According to a CBS Miami article, the phrase is taking on new meaning for a group of young professionals facing accusations of tax refund fraud.

If you read my commentary on a regular basis, you know that Florida is a hot bed of tax refund fraud. Well, not only is Florida the leading state for this kind of fraud, but Miami seems to find its fraud ranking far above any other city in the U.S. In the most recent crackdown, federal officials have indicted 11 individuals stemming from a $34 million tax refund fraud scheme. (Ok, will the indicted party please stand up? Please sit down if you don’t feel the heat from a $34 million looming fraud case. Great – you’re all still standing.) According to the indictment, the individuals are accused of stealing over 7,000 identities, including more than 2,700 from deceased individuals, to file fraudulent tax returns. The indictment further alleges that ”the defendants recruited ‘knowing participants and unknowing victims’ to put businesses, bank accounts and electronic filing ID numbers in the perpetrators’ names to carry out their schemes.”

The group of young professionals, ranging from ages 24-32, allegedly was able to avoid discovery by the Internal Revenue Service (IRS) by negotiating the income tax checks at one another’s personal businesses. Prosecutors are seeking to seize $443,449 from bank accounts, a 2011 Cadillac Escalade EXT Premium Sport, a 2010 Nissan Maxima, a 2011 Infiniti M37 and a 2010 Porsche. (If these charges are true, it looks like the money went flying out of the bank accounts as quickly as it went in.)

Officials have been working hard to crack cases like these. In fact, the article includes a note on a similar case that occurred in the area where fraudsters used the stolen identities of foreign nationals to obtain tax refunds. The culprits were sentenced to six years of jail and ordered to pay restitution in the amount of $1.15 million. (I see the problem, but exactly how extensive is it?? A U.S. attorney commented that there were at the least 178 identity theft complaints per 100,000 residents in Florida in 2012; in Miami the ratio is even higher: 324 identity theft complaints per 100,000 people. The IRS is working hand in hand with state and local authorities to help bring these scams to a stop.

Now, it is important to remember that the 11 defendants described above are innocent until proven guilty. They deserve their day in court. However, I’m sure the indictment lit a bit of a fire under them, and they are definitely feeling the heat. Regardless, it certainly won’t be enjoyable to watch the government speed away in their newly purchased hot-rods.

Source: Today’s ”Fraud of the Day” is based on an article titled, ”Eleven Indicted in $34M Tax Fraud, ID Theft Plot,” published by CBS Miami on February 9, 2013.

MIAMI (CBSMiami) – $34 million and the identities of thousands of dead people were at risk in a large-scale tax fraud scheme for which 11 people were indicted Friday.

The indictment charged the defendants with conspiring to defraud the Internal Revenue Service by stealing the identities of nearly 7,000 people, including more than 2,700 who were dead, to file fraudulent tax returns, according to federal prosecutors cited in this article by CBS4 news partner The Miami Herald.

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Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.