Using stolen Social Security numbers and their corresponding names and birth dates, the criminals – some of them convicted felons – have electronically filed hundreds of false returns with made-up incomes and withholding information, said Sgt. Randy Hayes, of the Richmond County Sheriff’s Office’s Technical Crimes Division.
The criminals get the refund, sometimes by check but more often through a convenient, but hard to trace, prepaid debit card the government approved to help people with no bank accounts.
Last month, a federal grand jury returned six indictments against 12 Georgians – including 19-year-old Porsche Pinkney, of Augusta – for 115 violations of federal law.
The charges, which carry a maximum punishment of more than 50 years’ imprisonment and a fine of $250,000, ranged from conspiracy to cheat the IRS to identity theft of medical records.
“They’re defrauding the federal government, and naturally the IRS wants its money back,” Hayes said of tax-refund fraud suspects.
He said that his office gets weekly reports of tax-refund fraud this time of year and that it can take a bank three weeks to a month before it realizes a check is bogus.
Such a check was reported Sunday, when Dondrea Johnson, 18, of Augusta, told police that her boyfriend’s cousin – later identified as Christopher Scott, 24, of 2435 Earl St. – tricked her into endorsing a $2,936 tax-refund check, depositing the fake slip into her bank account and paying Scott the balance in cash.
She said Scott disguised the scam as a “favor,” telling her he did not have a bank account or other means of cashing the check. According to a police report, he said he got the check from a “secret shopper” at Domino’s Pizza, where he works.
The check was deposited March 29. The bank discovered it was bad April 19, the same day Scott went missing.
Tax-refund fraud is costing taxpayers hundreds of millions of dollars annually. Johnson is being charged by her bank for the cashed check.
“I (was) just shocked that I cannot get my money back,” said Johnson, who spent an hour on the phone Monday with her bank but was offered only the convenience of a payment plan for the fraudulent check. “Because it was not stolen and I was basically tricked, the bank cannot claim the check as fraudulent. It’s not fair.”
David Oliver, the senior vice president of the Georgia Bankers Association, said the transaction is commonly referred as the “stranger in need” scam and at times can be converted into a “sophisticated tax forgery,” in which bilkers use fake IDs to complete a transaction.
“Our banks are on the lookout, but unless there is a specific reason to suspect the person presenting the check is not who they say they are, it can be hard to detect and prevent,” said Oliver, who urged account holders to be “careful and cautious” when accepting checks.
Hayes said that when cases are filed in Richmond County, they are referred to the IRS and Secret Service because those agencies have access to privileged documents, such as tax returns and personal files.
Michael Dobzinski, an IRS spokesman, said Monday that there has been a significant increase in cases related to the fraud in the past three years.
“Refund fraud these days is a fairly common practice that we are trying to suppress through a number of methods,” Dobzinski said.
In January, he said, the IRS, in collaboration with the Department of Justice and the U.S. attorney’s office, conducted a nationwide sweep in which 390 people – 25 of whom were from the Augusta area – were targeted for refund fraud.
The sweep represents more than half of the 670 criminal identity theft investigations currently open.
In comparison, statistics show the IRS’ criminal division tripled the number of identity theft investigations it opened in fiscal year 2012, starting 900 investigations. As a result, nearly 500 people have been indicted across the country, with those who were sentenced spending an average of four years in prison.
Hayes said that after a case is referred, the sheriff’s office contacts victims and gives them a copy of the initial police report and a number to call for help. Johnson said she plans to file a criminal complaint against Scott and seek restitution.
Though it might take up to a year to get a refund, the IRS is collaborating with more than 130 financial institutions and assigning more than 38,000 employees to investigate fraud schemes and block refunds from reaching identity thieves.
This effort has protected hundreds of millions of dollars so far, Dobzinski said.