An Internal Revenue Service employee in New York has been charged with stealing over $160,000 in unclaimed tax refunds.
An indictment was unsealed earlier this month charging IRS revenue officer Fern Stephens on charges of mail fraud, theft of government funds, and unlawful access of a government computer, relating to Stephens’s theft of more than $160,000 in unclaimed tax refunds. Stephens was arrested December 17.
Stephens has been an IRS employee since January 1984 and has served as a revenue officer since at least the early 1990s. In that capacity, she has been responsible for the collection of taxes from both individuals and corporations.
From March 2003 through November 2010, Stephens allegedly used her position as a revenue officer to steal taxpayer funds held by the IRS. She accomplished this by, among other things, making false entries in an IRS system known as the Integrated Collection System, according to prosecutors. In these entries, she falsely documented purported requests to transfer corporate or business entity tax refunds or payments. Stephens then caused the IRS to issue checks, wires and credits to her relatives and close associates.
Because Stephens was responsible for collecting tax debts, she was in a position to know when an owner of a small business did not know the IRS owed it money. For example, in 2003, Stephens allegedly stole $3,340.20 from a bankrupt company that had been based in Manhattan. She did so by claiming that the principal of the business contacted the IRS and asked for the refund to be issued in the principal’s name, according to prosecutors. In fact, the "principal" to whom Stephens had the refund check issued was her niece, who, according to the true owner of the business, had no claim to this money whatsoever.
The scheme began in March 2003 and continued through November 2010. In total, Stephens allegedly stole over $160,000 belonging to 12 taxpayers, which she sent to eight family members and associates.
If convicted of all counts, Stephens faces up to 35 years in prison.
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