A Bulgarian hacker has admitted to participating in a $6 million fraudulent tax return scheme in which he used tax-filing information stolen from at least four major CPA firms in the U.S.
Vanyo Minkov, 32, pleaded guilty Monday before U.S. District Judge Jose L. Linares in a Newark, N.J., federal court to a superseding information charging him with one count of conspiring to file false and fraudulent tax returns.
In late 2012, Minkov and other conspirators allegedly hacked into the networks of at least four accounting firms and stole the 2011 tax filings for over 1,000 of the firms’ clients. The names of the accounting firms were not publicly identified by prosecutors, but according to the 2013 indictment and the more recent superseding information, one CPA firm was based in Connecticut, two of the others were in California, and the fourth was in Pennsylvania.
“As far as the four accounting firms, they’re not mentioned in the public record, so there’s no way to know what those accounting firms are, except for the fact that they are CPA firms,” said an IRS Criminal Investigation spokesman.
Minkov, a Bulgarian citizen, was extradited to the U.S. in 2013. Minkov and others allegedly used the stolen information to file fraudulent tax returns in the clients’ names for the 2012 tax year or sold the information to others for the same purpose. To date, the IRS has identified over $6 million in fraudulent claims made in connection with the scheme. His attorney, Jack Arseneault, declined to comment.
The charge to which Minkov pleaded guilty carries a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Oct. 13, 2015.
In 2013, Minkov was also charged with participating in a scheme with his co-conspirators to steal credit and debit card numbers, PIN codes and corresponding personally identifiable information from various sources and then selling the information on the Internet for profit. They used various means such as ATM skimming equipment installed on ATM machines to steal the credit and debit card numbers. He also allegedly acted as a reseller of data stolen by others that could be offered for sale on the Internet. During the course of the conspiracy, Minkov allegedly offered for sale debit and credit card numbers and related personal information on more than 100,000 accounts.
U.S. Attorney Paul Fishman credited special agents of the U.S. Secret Service’s Newark Field Office, under the direction of special agent in charge Carl Agnelli, and special agents of IRS-Criminal Investigation, under the direction of special agent in charge Jonathan D. Larsen, for the investigation leading to Minkov’s plea, along with the FBI, under the direction of special agent in charge Richard M. Frankel in Newark, the Justice Department’s Office of International Affairs in Washington, as well as the Supreme Cassation Prosecutor’s Office of the Republic of Bulgaria and its law enforcement partners. The government was represented in the case by Assistant U.S. Attorney Andrew S. Pak of the Computer Hacking and Intellectual Property Section of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
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