The Name of the Game

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11184467 - young people queuing to withdraw cash in an atm

We’ve all played games, whether it’s kickball in the school yard, craps at the casino or the newest alien warfare video game. And, we’ve all learned the lesson that not every game is fair, even if there are rules that need to be followed. A Montgomery Advertiser article revealed how one Alabama woman learned the name of the game when it comes to playing games with the federal government.

For some people, the temptation to act in order to get what they want is too much. In the case of an Alabama state worker, the temptation to access state files to steal peoples’ personal identification information proved to be a losing battle.<i? The woman pleaded guilty in U.S. District Court to one count of wire fraud and one count of aggravated identity theft, all part of a tax refund fraud scheme targeting the Internal Revenue Service (IRS). An investigation found that the scheme began in October 2009, and ran until April 2012. The woman faces between two and 22 years in prison, three years of supervised release, restitution and a maximum fine of $750,000. So, how exactly did a nearly three-year scam rack up such a penalty in jail time? (She didn’t play by the rules; you can’t take other peoples’ tax refunds for yourself.)

The three-year scam started when the fraudster used her access to state databases to obtain personal identity information from other individuals. She then used her state email address to email the identity information to co-conspirators. The co-conspirators then used what officials call an ”elaborate network” to submit false tax returns forms using the personal identity information. The tax refunds were laundered back to the source via debit cards, and returned to the co-conspirators. Court records indicate that the fraudster’s main partner in the scheme filed over 1,000 false tax returns claiming more than $1.7 million in returns. (This is a game with high stakes.) The partner was sentenced to 12 years in prison and to pay $1,291,658 in restitution. (REALLY high stakes.) The crackdown is a product of the partnership between the IRS and Justice Department’s Tax Division, as well as local authorities.

There’s only one thing I’d say to this woman after she receives her sentencing? ”That’s the name of the game.” She should have known going into her scheme that playing a game with the federal government could turn out in a big loss for her.

Source: Today’s ”Fraud of the Day” is based on an article titled, ”Montgomerian Stole State Workers’ Identity Info for Fraud Scheme,” written by Rick Harmon and published by the Montgomery Advertiser on May 30, 2013.

A Montgomery woman, Lea’Tice Phillips, pleaded guilty Thursday to wire fraud and aggravated identify theft for using her state job to steal identity information that was then used as part of a scheme to file more than $1.7 million in fraudulent tax refunds.

The former state worker pleaded guilty in U.S. District Court in Montgomery to one count of wire fraud and one count of aggravated identity theft for her role in a scheme that used false tax returns to defraud the Internal Revenue Service, according to the Justice Department and 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.