Serious as a Heart Attack

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Just as a massive heart attack can cause extensive damage to the heart, a massive fraud attack can also deliver a significant amount of damage. Tax fraud schemes, which are organized by opportunistic criminals, cause large amounts of federal money to be wrongfully disbursed. The scam is further perpetuated by involving others—either by consent or not—in a pyramid scheme where the federal government is fleeced. According to The Free Lance-Star, one long-running tax fraud scheme that was recently halted involves a Virginia man, who received nearly $500,000 in tax refund dollars he did not deserve.

The tax fraud scheme involved a network of more than 130 people who helped carry out the scam. (That would definitely be considered massive.)Approximately 12,000 bogus tax returns requesting $42 million were filed in the names of people who had their identities stolen—the elderly, assisted-living facility residents, drug addicts and prisoners. (And let’s not forget the willing participants. It’s amazing the number of people who come out of the woodwork when there’s free money to be had.)

The Virginia man at the center of today’s ”Fraud of the Day” happened to be one of the willing participants. He agreed to let other co-conspirators use his name and personal information to submit bogus tax returns. The lucrative illegal venture was perpetuated when he recruited others who agreed to allow their addresses and bank accounts to be used for processing refund checks.

The 35-year-old man, who filed 444 fraudulent tax returns seeking $1.5 million in refunds over a period of six years received a third of that amount in refunds. He split the proceeds with his co-conspirators and also sold the fraudulent checks to willing purchasers for a fee. (He probably considered himself very generous, even though it was at the expense of the government.)

The fraudster pleaded guilty to participating in the massive tax fraud scheme, along with 19 others who had previously owned up to their part. Convicted of conspiracy to defraud the U.S., theft of public money and aiding and abetting others, he faces a maximum of 35 years in prison. As part of a plea agreement, he will pay $493,436 in restitution to the Internal Revenue Service.

Just one tax fraud scheme may seem like a drop in the bucket, but combined with many others, the effects are massive and far-reaching. When tax dollars are stolen, there are fewer funds available for civic improvement and critical government assistance programs. This case shows how serious the government is about preventing other massive attacks that hit the heart of the country—honest taxpayers.

Source: Today’s ”Fraud of the Day” is based on the article, ”Fredericksburg man admits role in massive tax fraud” published by The Free Lance-Star, on March 7, 2016.

FREDERICKSBURG – A local man pleaded guilty in federal court Monday to taking part in a massive tax refund fraud scheme that involved numerous stolen identities.

Bradley King, 35, of Fredericksburg was convicted in U.S. District Court in Washington of conspiracy to defraud the United States, theft of public money and aiding and abetting in fraud.

According to court records, King was directly involved in the filing of 444 fraudulent tax returns between 2008 and 2013. The returns sought more than $1.5 million in refunds and nearly $500,000 worth of unmerited refund checks were actually sent out. As part of his plea agreement, King agreed to pay $493,436 in restitution to the IRS.

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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.