The Internal Revenue Service’s Criminal Investigation unit released its annual report Thursday, as the group contends with a shrinking budget and recent controversy over its use of cell phone tracking technology.
The report highlights the IRS CI’s significant accomplishments and enforcement actions taken in fiscal year 2015. Focusing on tax-related identity theft, money laundering, public corruption, cybercrime and terrorist financing, IRS CI initiated 3,853 cases in FY 2015.
“Our criminal investigators continue to bring complex and meaningful cases that have a significant impact on tax administration,” said IRS Commissioner John Koskinen in a statement. “This work also plays an important deterrent effect on would-be criminals, helping ensure fairness for taxpayers and protecting voluntary compliance in our tax system. The report is a tribute to the important work done by IRS Criminal Investigation.”
During a press conference Thursday, IRS Criminal Investigation chief Richard Weber discussed some of the findings in the report, as well as how the IRS has changed its policy on the use of cell site simulators for tracking cell phones. He noted that IRS CI has issued reports on its activities going back to 1919 and has been issuing the reports on an annual basis for the past three years since he took over as chief.
“The report showcases the great work that my special agents across the country have worked on over the last year on a host of different types of cases, focusing on tax fraud and all forms of financial crime, money laundering, cybercrime, terrorist financing and corruption,” he said.
The report also shows the impact of budget cuts on the IRS over the last few years. “We can’t get around the simple truth that we’re going to do less with less resources,” said Weber. “We’re not going to be able to do more with less, although I still think the quality of our cases have been significant and the types of cases have been significant. The one statistic I’m incredibly proud of is our conviction rate, which was 93.2 percent, the highest conviction rate of all the law enforcement agencies in this country. I think that shows the sustained quality of the work that we do in the agency.”
Among the recent high-profile cases are the IRS’s work on uncovering corruption among top soccer officials at FIFA, working with Department of Justice officials, and the conviction of Ross Ulbricht, the creator and owner of the “Silk Road” website, who was sentenced to life in prison and ordered to forfeit more than $183 million for his role in money laundering and drug charges.
Weber was asked about recent revelations that IRS criminal investigators have been using cell phone tracking technology through a cell site simulator device. In a letter last week to Sen. Ron Wyden, D-Ore., the ranking Democrat on the Senate Finance Committee, Koskinen said the IRS would not use cell phone tracking technology without first getting a warrant.
“CI issued a policy on November 30 which basically tracked the Department of Justice policy, similar to the Department of Homeland Security policy,” said Weber. “Effective November 30, we will follow the DOJ guidance, which is that our agents will obtain search warrants any time that we use a cell site simulator. That policy was distributed to our agents on the 30th of November.”
He explained further about the policy. “I do know that my agents have followed the law every time that they utilized the cell site simulator device,” he said. “We have one device that we were using since 2012. We used it in 11 grand jury cases, and 37 phone numbers were recorded that were connected to the 11 cases. We work with the U.S. Attorney offices and every one of those cases our agents work with a federal prosecutor and we follow all U.S. Attorney procedures as well as the law.”
Weber noted that the law does not require IRS CI to obtain search warrants, although the Department of Justice came out with guidelines in October requiring that agents and prosecutors should now obtain a search warrant.
“We decided to follow that guidance,” he said. “Prior to that, there was no requirement at all to obtain a search warrant, and we followed every aspect of criminal law and criminal procedure.”
He stressed that the IRS followed the law in every instance, but it has now changed its policy to align with the Justice Department’s policy. “We have not used the device since October, the day that the Justice policy came out,” he added. “We suspended the use of the tool until our policy was finalized and sent out on November 30.”
The cases where the devices were used included cases involving murder, attempted murder and gun trafficking.
Weber also gave an update on the IRS’s efforts to combat identity theft. He noted that while the effort appeared to be working, particularly in Florida, as the IRS stepped up its efforts to work with state and local law enforcement, the identity thieves appear to be moving from Florida to other parts of the country such as the Charlotte, Dallas and Atlanta areas.
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