Serious as a Heart Attack


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.

Read More

Previous articleStrike ‘Em Out!
Next articleBalancing the Scales
Larry Benson
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.