An Internal Revenue Service employee who worked for the Taxpayer Advocate Service, where her job was to help taxpayers resolve their identity theft problems, pleaded guilty to stealing identities and orchestrating a tax-fraud scheme involving up to $1.5 million in fraudulent income tax returns.
Nakeisha Hall, 39, entered her guilty pleas Monday before U.S. District Judge Karon O. Bowdre to theft of government funds, aggravated identity theft, unauthorized access to a protected computer and conspiracy to commit bank fraud and mail fraud affecting a financial institution. She acknowledged in her plea that the tax fraud conspiracy had an intended loss to the IRS of between $550,000 and $1.5 million. Hall agreed to restitution and forfeiture of $438,187, representing funds actually paid out by IRS as a result of the scheme. Hall’s sentencing is scheduled June 29.
Hall worked in the Taxpayer Advocate Service office in Birmingham from July 2007 to November 2011. Since November 2011, Hall has worked in TAS offices in Omaha, Neb., New Orleans, La., and Salt Lake City, Utah. TAS is responsible for assisting taxpayers who are having difficulties with the IRS. TAS works with victims of identity theft and assists them in removing fraudulent tax information from their accounts and in filing corrected tax returns, if necessary.
“Ms. Hall used her IRS access to compromise taxpayers’ identities and try to steal more than $1 million dollars from the U.S. Treasury,” said U.S. Attorney for the Northern District of Alabama Joyce White Vance in a statement. “Taxpayers must be able to trust that IRS employees will protect their sensitive information, not steal it and corrupt it for personal gain. I thank the TIGTA and IRS-CI investigators who helped my office ensure that this crime was prosecuted and punished.”
A federal grand jury in December indicted Hall, along with Jimmie Goodman, 37, and Abdulla Coleman, 37, both of Birmingham, Ala., on charges they took part in the scheme, which operated out of Birmingham between 2008 and 2011 (see IRS Taxpayer Advocate Service Employee Charged in Identity Theft Scheme). The scheme involved stealing personal identity information from the IRS to create fraudulent tax returns, and collecting the stolen refunds that were generated. A separate indictment charged another co-conspirator, Lashon Roberson, 36, of Pelham, Ala., with the conspiracy and four counts of mail fraud affecting a financial institution. Roberson is scheduled to plead guilty on Wednesday.
Goodman is scheduled for trial Feb. 29, and Coleman is to be arraigned on the charges against him on Thursday, after being arrested in Madison, Wis., and transferred to the Northern District of Alabama.
According to the indictments and Hall’s plea, Hall, Goodman, Coleman, Roberson and at least one other individual, conspired to defraud both the IRS and financial institutions, including Bancorp Bank, between January 2008 and November 2011, and used the U.S. mail to execute the fraud. Hall, Goodman, Coleman and Roberson also conspired to obtain money from Bancorp Bank and other financial institutions. Bancorp Bank and other financial institutions issue stand-alone debit cards for the purpose of accepting tax refunds.
According to prosecutors, Hall obtained individuals’ names, birth dates and Social Security numbers through unauthorized access to IRS computers. She used the personal identity information to prepare fraudulent income tax returns and submitted them electronically to the IRS. Hall asked the IRS to pay the refunds onto debit cards and directed that the cards be mailed to drop addresses that she controlled. She solicited and received drop addresses from Goodman, Coleman, Roberson and at least one other person. Her co-conspirators also collected the refund cards from the mail.
Hall activated the cards by using stolen identity information. She, Goodman, Coleman, Roberson and the unnamed co-conspirator allegedly took the money off the debit cards at ATMs or used the cards for purchases. If the fraudulent returns generated U.S. Treasury checks rather than the requested debit cards, Hall and her co-conspirators used fraudulent endorsements in order to cash the checks. Hall compensated Goodman, Coleman, Roberson and the fifth co-conspirator by giving them a portion of the refund money, or by giving them refund cards for their own use.
“Abusing her position with the Internal Revenue Service, Ms. Hall stole the identities of taxpayers through unauthorized access to IRS computers and filed false tax returns seeking more than a million dollars in tax refunds,” said Karl A. Stiften, special agent in charge of IRS Criminal Investigation’s St. Louis Field Office. “This defendant systematically defrauded the government and blatantly disregarded the victims of her scheme.”
The theft, aggravated identity, and unauthorized access counts relate to two specific taxpayers’ information that Hall accessed and used in 2010.
The conspiracy charge carries a penalty of up to 30 years in prison and a $1 million fine. The maximum prison penalty for theft of government funds is 10 years in prison. Aggravated identity theft carries a mandatory two-year prison term, which must be served consecutively to any other sentence imposed in the case, and unauthorized access to a protected computer carries a maximum five-year prison term. All three charges carry a maximum $250,000 penalty.
IRS Criminal Investigation and the Treasury Inspector Generation for Tax Administration investigated the case, which Assistant U.S. Attorney Erica Williamson Barnes is prosecuting.
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