Federal charges have been filed against 40 defendants in 20 separate cases in Florida dealing with thousands of stolen identities and millions of dollars of fraudulent identity theft tax filings.
A special strike force including federal prosecutors, the IRS’s Criminal Investigation division, the FBI, the Secret Service, the Social Security Administration and local police departments in Miami and nearby towns in South Florida announced the crackdown Wednesday.
According to the Federal Trade Commission, Florida had the highest rate of identity theft in the United States in 2011, they noted. While identity theft in Florida ranks highest in the United States, the identity theft rate in Miami has reached near epidemic proportions. Florida’s rate of 178 complaints per 100,000 residents is dwarfed by the Miami rate of 324.1 complaints per 100,000 residents. The City of Miami’s per capita number of false returns based on identity theft was 46 times the national average, and its per capita SITR fraud dollar value was more than 70 times the national average. Worse still, the problem is projected to grow.
A September 2012 report by the Treasury Inspector General for Tax Administration found that Florida has the highest rate of stolen identity tax refund fraud in the United States. The report identified 74,496 potentially fraudulent returns filed in Miami, resulting in more than $280 million in bogus refunds. The TIGTA report estimates that the IRS could issue as much as $21 billion in fraudulent tax refunds over the next five years.
In an attempt to combat the rising wave of stolen identity refund scams, and armed with newly enhanced investigative and prosecutorial tools under the Department of Justice’s Tax Directive 144, the U.S. Attorney’s Office for the Southern District of Florida established the South Florida Identity Theft Tax Fraud Strike Force. Members of the Strike Force include IRS-CI, the U.S. Secret Service, the FBI, the U.S. Postal Inspection Service, the City of Aventura Police Department, the Miami-Dade Police Department, the North Miami Beach Police Department, and the SSA-OIG. The focus of the Strike Force is to investigate and prosecute SITR fraud in the SDFL. Today, U.S. Attorney Ferrer, joined by members of the Identity Theft Tax Fraud Strike Force, announced the most recent results of their investigative efforts.
“So far this year, we have charged a total of 79 individuals responsible for almost $40 million in fraudulent tax refunds obtained through identity theft,” U.S. Attorney Wifredo A. Ferrer said in a statement. “The cases being investigated and prosecuted include victims from all walks of life, including police officers, potential U.S. Marine recruits, members of the Armed Forces, holocaust survivors, school children, hospital patients, the elderly and infirm, incarcerated prisoners, and even the dead. In addition, our cases show a troubling change in the nature of these cases, away from traditional white collar criminals to more violent criminals, like gang members and narco-traffickers, who are using stolen identity refund scams to fuel their other, violent, criminal activities. We will continue to crack down on identity thieves who are lining their pockets with our tax dollars and using violence to obtain the personal identification information of others.”
“Today’s announcement should reassure American taxpayers that IRS Criminal Investigation has put into action our pledge to make investigating identify theft and refund fraud a top priority,” said IRS Criminal Investigation chief Richard Weber. “Be assured that we are serious about investigating these crimes and, as we capitalize on the collective strength of the Identity Theft Tax Fraud Strike Force, we will succeed in vigorously pursuing the criminals who steal from the American taxpayer.”