Feds Uncover Massive Fraud, IRS Scammed Out of Billions
- Posted on April 2, 2012 at 8:05pm by
Becket Adams
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Federal authorities have uncovered a widespread scheme that may have defrauded the Internal Revenue Service (IRS) out of billions of dollars using the stolen identities of Puerto Rican citizens, according to a recent report from the Wall Street Journal.
“The perpetrators of the scheme, authorities say, swipe the Social Security numbers of Puerto Rican citizens, who don’t have to pay federal income tax—and are less likely to be on the IRS radar—and use their information to file fake returns,” the report adds. ”In some cases, they enlist U.S. mail carriers to intercept the refund checks that are disbursed [emphasis added].”
Dating back to 2007, the plan involves participants from both the U.S. and Latin America. Two sources claim the scheme was led by a group from the Dominican Republic. And although prosecutors have managed to obtain several convictions, they don’t think they’ve come close to catching the operations “top players.”
“What we have uncovered may very well be the tip of the iceberg,” said Manhattan U.S. Attorney Preet Bharara, whose office was among the first to investigate the group. “It’s a massive fraud.”
So how did the plan work? The Journal explains:
The alleged scammers use the stolen Social Security numbers to file fake documents from companies purporting to withhold tax, then fake returns that are structured to ensure the filer is owed a refund.
The refund checks are mailed to the addresses on the forged documents even though the addressees don’t live at those locations, which is why some [U.S.] postal workers have been recruited [as mentioned in the above]…
Once the checks are collected, participants in the fraud take them to bank tellers or employees at money-service locations who often have taken bribes, according to court documents submitted in several cases.
The checks often are worth between $5,000 and $7,000 each, investigators say, with stolen identities of children sometimes used to add dependents to the returns in order to inflate the refunds.
If a Puerto Rican citizen has never paid federal income tax, it looks to the IRS as if the person filing a return simply moved to the continental U.S. and began working.
At least three U.S. postal carriers have been sentenced for crimes tied to stolen identities from Puerto Rico, according to the report.
“The scheme has metastasized and spread,” from New York City and Boston, said Serrin Turner, an assistant U.S. Attorney in Manhattan. According to Turner, investigations into similar schemes are being conducted in Massachusetts, Pennsylvania, North Carolina, Connecticut, Florida, Rhode Island, New Jersey, and California.
Source: Wall Street Journal
At this time, it’s uncertain just how much money the IRS lost to the Puerto Rico scam but it’s estimated to be about $2 billion, according to sources familiar with the investigation.
(H/T: WFB)
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Comments (177)
rl
Posted on April 2, 2012 at 9:30pmFEDS UNCOVER MASSIVE FRAUD, IRS SCAMMED OUT OF BILLIONS
What else is new?????
Will the government do ANYTHING about it????? Hell NO!!!!!!!!!!!
Report Post »db321
Posted on April 2, 2012 at 9:43pmThis happen on Obama watch.
Report Post »FreedomPurveyor
Posted on April 2, 2012 at 9:45pmJust think of all the jobs that are creating by investigating and prosecuting this! Government efficiency at its finest!
Report Post »chips1
Posted on April 2, 2012 at 9:55pmMassive fraud? You mean like Obama? That massive fraud? Who would have thought!!!!
Report Post »C. Schwehr
Posted on April 2, 2012 at 10:12pmThey set up the conditions by which they allowed millions of criminals into the country. Let them live with the results.
Report Post »MAMMY_NUNN
Posted on April 2, 2012 at 10:40pmAny Government program is riddled with fraud because there is no oversight or Accountability.
Report Post »Such as Medicare no one checks to see if what was billed was actually done they just pay the bill.
jzs
Posted on April 2, 2012 at 10:58pmFirst of all, the IRS is illegal. Second, taxing people under this administration is only for the purpose of restributing wealth, although taxes for corporations and rich individuals is far, far less than they were under Reagan. Still taxes are only for doing this redistribution thing – although less than Reagan did – so it’s like, unconstitutional or something now, because we have a liberal black guy calling all the shots.
I don’t care what taxes were like under Truman or Reagan or the Bushes! even though taxes are lower than ever. Now, unlike before, it’s a redistribution of wealth. Before it wasn’t, now it is. Who cares what taxes were under Reagan? That’s irrelevant. Let’s give billions of dollars to the oil industry (even though they are making record profits), even more tax breaks to the rich too. And to pay for that let’s tax the middle class and poor even more (that’s you and me) and eliminate any program that helps anyone making less than a million a year.
Let’s get rid of any program that provides health services to the poor as a start. Who gives a s- what happens to them? Churches have that covered. Then college loans. Then breakfast programs. If we elminate all programs that give the poor a leg up, then that’s one more step toward dominance of those people who are most deserving if you know what I mean (wink!).
Report Post »Mr. H.
Posted on April 2, 2012 at 11:00pmThe Pickford fraud of the Department of Agriculture settlement is also happening on Obama’s watch and he is doing nothing about that either.
Report Post »rawmilker
Posted on April 2, 2012 at 11:13pmthey were pulling this crap down in the south FL ghetto last year, they caught a bunch of obama supporters red handed using ss#’s of dead people for fradulent returns
Report Post »Cat
Posted on April 2, 2012 at 11:51pmJust returned from DC, and folks, don’t know about you, but it doesn’t take a sensitive olfactory nerve to recognize that rat infested chunk of real estate literally stinks like rotten, stinking, lying political jackasses and pachyderms.
This is nothing more then the real crooks diverting attention away from themselves
The IRS is your enemy, and your enema …
Report Post »Wake the phuque up America
Anarcho Capitalist
Posted on April 3, 2012 at 12:01amHow can the IRS be fraud-ed out of stolen loot?
Report Post »Mil Mom
Posted on April 3, 2012 at 12:20amWill someone in Chicago be behind it, or are they studying to find out why they didn’t think of it first?
Report Post »grizz3330
Posted on April 3, 2012 at 12:36amHow exactly is this Obama’s fault? considering this scam started in 2007? wow, people will really place blame on anyone but the people who are at fault. It no one’s fault. These people had a very genius scam that worked. It is not the first time and it wont be the last. So I guess the average citizen who get his identity stolen and scammed, its the scammed person fault? I thought this was a christian editorial, but all i see are hateful people. very very very un-christian like. i hope you negative commenters who place blame on everyone but the actual criminals and talk down and so badly about others dont claim to be Christian, God help you if you do. Geesh!
Report Post »Cat
Posted on April 3, 2012 at 1:11amGrizz >
The real crooks are the slick characters embedded in our government.
They know everything about us by forcing us identify and label ourselves.
Then they demand we conform to their rules, and of we don’t, they steal everything from us then incarcerate us for not conforming.
We must understand our true enemy, and keep them close, in order to destroy them more swiftly then they’re destroying us.
We’ll never survive as a free nation otherwise …
Report Post »000degrees
Posted on April 3, 2012 at 6:23amOur elected officials would rather deal with a little of this bad press than give up the power that goes with redistributing the wealth. Nothing will be done…..wait….gotta go American Idol is on……
Report Post »usedCZARsalesman
Posted on April 3, 2012 at 8:10amJZS, you are beyond a moron…do you wake up every morning and have kool-aid with your breakfast?
The ONLY reason Reagan had “higher” tax rates than Obummer is that he inherited (from who? I just can’t seem to remember what socialist was in office before him) a top rate of 70%! As soon as he had the means to lower then he did. The first time from 70% to 50%, then all the way down to 28% (don’t let those pesky little “facts” bother you, since that 28% is LOWER than Obummers 35%). The only rate that was higher under Reagan was the LOWEST one, and I guess he was just cruel for expecting people to actually have to put ANYTHING AT ALL into the system if they were going to suck off it like leaches. I make FAR less (24K/year to feed a family of 5) than most of the people on all those programs you claim are the lifeline of the poor, and I survive all by myself with no assistance. Your argument is amazingly flawed, but since you are paid to spew this nonsense Im sure you already knew that.
Report Post »HKS
Posted on April 3, 2012 at 8:26amWhile the big O was busy harping on those million airs and billion airs the lower 99 was kicking the crap out of his IRS system. Pathetic.
Report Post »Tony
Posted on April 3, 2012 at 8:30amAnother form of wealth redistribution….which is stealing whether thru a scam or gov policy.
Report Post »666Sucks
Posted on April 3, 2012 at 8:48amLOL! On Obama’s watch? It says as far back as 2007! Obama don’t need no stinking elaborate scheme. He just writes checks to all his friends (America’s enemies) to the tune of 6 F’n TRILLION!
Report Post »D-Fence
Posted on April 3, 2012 at 8:55amJZS I understand your facetious rant. No one is talking about not helping the poor who need a helping hand. It’s the perpetual welfare individuals. Do you see what kind of government we have now? Do you see what kind of government we had under bush? Not any better. Crony capitalism, crony socialism. What’s the difference? The people who make between $50k – $100k are the one who get screwed. The wealth don’t have to worry about gas prices, inflation,…. The welfare people don’t either since most do not drive. You and your kind in the name of “Equality” want to change America into some sort of stupid European state. I want America to be what it was meant to be, before knuckleheads who thought they could do it better in the name of “progress” screwed things up. Before people who were greedy put big business in “cahoots”, is that a word, the government. C’mon people! If you want a socialist country there are plenty to choose from without destroying this country. C’mon people! If you want a corporate government back off or you hit the klink! That’s my rant for the day.
Report Post »edcoil
Posted on April 3, 2012 at 9:22amIts Puerto Rico 75% unemployment. The most money comes from unemployment checks paid by Americans – how is the IRS out money.
Report Post »Neo Con John
Posted on April 3, 2012 at 10:18amAnd they are all obbamma bundlers and supporters!
Report Post »SREGN
Posted on April 3, 2012 at 10:37amLet’s see, so the real taxpayers, who are already paying twice as much as they should because of the 50% who don’t pay any, will have to now pay for the money the scammers stole, pay extra to replace what the government didn’t get, and pay for the extra people the government will have to hire to fight fraud. Go Galt, taxpayers. It’s the only answer.
Report Post »johnjamison
Posted on April 3, 2012 at 11:09amCompare that to the 865,000,000,000 in fraud by the Obama camp and it’s peanuts.
Report Post »Ruler4You
Posted on April 3, 2012 at 11:27amThis is the problem with insisting on a system that was DESIGNED to be a P O S for strictly political considerations.
All of this “IS” avoidable with a simple tax system that is both Flat and Fair. But, we won’t see that, ever. Because it’s too advantageous for politicians the way it “IS” right now.
Examples? Well, let’s take some recent examples. Like, say the new Obango StalinCare health care mandate.
This “mandate” isn’t even in effect, yet. But literally HUNDREDS of exemptions, or amnesties if you will, from that mandate have been ‘declared’ by the president himself.
You can find ‘some’ clarifications to the claims here: http://www.snopes.com/politics/medical/exemptions.asp
But this should help you to understand the “political” nature of the IRS and the punitive tax code. But one more thing, these ‘exemptions’ are for “organizations”, or giant “businesses” and while they do apply to their people, it’s YOU and ME that are the target. We can‘t defend our selves against the government because we are ’individuals.’ Not collectives.
Report Post »mikester8888
Posted on April 3, 2012 at 11:28amI smell Andy Stern
Report Post »omgfolks
Posted on April 3, 2012 at 11:46amYes they will do something about it, they will give them a bailout and charge the citizens of this country to make it up.
Report Post »USAMEDIC3008
Posted on April 3, 2012 at 12:28pmBut they will give you the best
Report Post »healthcare money can buy..
ACLUHater
Posted on April 3, 2012 at 1:37pmIt‘s Bush’s fault.
Report Post »ketrout
Posted on April 3, 2012 at 1:52pmI am sure that you are right. It seems to me that they are more concerned with suing the states and keeping our borders wide opened than dealing with the fraud and corruption within our federal government.
I don’t understand why there are so many Americans out there that keep voting these idiots into office!
Report Post »deeberj
Posted on April 3, 2012 at 2:27pmI thought it should say, FEDS MASSIVE FRAUD, IRS SCAMS BILLIONS FROM PEOPLE
Report Post »RamonPreston
Posted on April 3, 2012 at 4:15pmHey, it’s less than our politicans have stolen from us.
Report Post »Walter P
Posted on April 2, 2012 at 9:28pmThings like this make the flat tax, no refund policy sound so much better.
Report Post »soybomb315
Posted on April 2, 2012 at 10:01pmmitt romney does not support the flat tax
Report Post »http://cnsnews.com/news/article/romney-taxes-i-want-make-sure-we-maintain-progressivity-code
chazmo
Posted on April 2, 2012 at 10:27pmRomney is a dope…
Report Post »Cat
Posted on April 3, 2012 at 1:22amWalt >
A flat tax still taxes the producers
The government seeks the easiest path to steal money and that way is by taxing the people that actually introduce value to the economy
How about a tax that taxes everyone?
It’s called a consumption tax
We need to completely dump the entire concept of an income tax in the garbage can, it’s killing this nation.
The problem we’re facing as Americans, is the socialist government wants to steal it ALL
They’re nothing more then phuqing crooks who can’t produce a damn thing !
BTW, how convenient, a story about defrauding the IRS, just before it’s time to fork over more of our money to them …
Report Post »aplingtjayonia
Posted on April 2, 2012 at 9:28pmDoes this Zedo popup company have consent from the blaze to do what they do? They really slow down my navigation of this website.
Report Post »Dispman
Posted on April 2, 2012 at 10:04pmI worked with my Antivirus Software company to help get rid of the zedo pop-unders. I still get the zedo pop-unders on occasion but not nearly as frequently as before. I agree that there needs to be a way to identify the origin of these pesky ads so that they can be eliminated.
Report Post »woodyb
Posted on April 2, 2012 at 10:05pmTry turning on your pop-up blocker. I have NEVER seen a pop-up rom any Zedo Company.
Report Post »MAMMY_NUNN
Posted on April 2, 2012 at 10:35pmI don’t use Windows any longer but here is the best malware tool I have found just use the free version.
http://www.emsisoft.com/en/software/antimalware/
Report Post »MEANS2RESIST
Posted on April 2, 2012 at 11:08pmyes, these pop ups are a pain in the neck & yes it slows the site nav down.
Report Post »objectivetruth
Posted on April 3, 2012 at 9:08amZedo is worse than you may think.Its linked to a unusual rootkit.Are you just having problems at this site?Have you noticed that you have started to have a slower computer in general since visting this site?If its just at this site then a pop up blocker will solve the problem.If not then you may need to unregister the dll associated with zedo.It seems bundled in with adware.It may be part of something bigger.Hint visit the fbi site [cyber crimes]to get more knowledge.I’m not trying to be difficult in not leaving a link.Once you read I hope you will understand why I didn’t.
Report Post »nugykent
Posted on April 2, 2012 at 9:25pmjust think of the billions in drug revenue that they miss out on.and yet a lot of the people that deal drugs get welfare and other social programs too.
Report Post »spirited
Posted on April 2, 2012 at 9:16pmHow about the many who lived and worked in the US long enough to collect social security benefits (which they’re entitled to), then move back to their homeland. They do not live in the US, yet, recieve a monthly check –along with benefits of the country they live in. Rather than the country they live in receiving a portion of the US social security payments by paying tax to the country for their income), they have it mailed to a US address –and deposited by a friend, relative or other.
>Speaking of billions of dollars of fraud
Report Post »cal_105
Posted on April 2, 2012 at 9:15pmIt is just paper money anyway. The government can print as much as they need and besides they would waste it anyway by putting it down a rat hole.
Report Post »soybomb315
Posted on April 2, 2012 at 9:11pmpuerto ricans dont pay income taxes but yet they get our military protection and get to vote in our republican primary? wtf
Report Post »soybomb315
Posted on April 2, 2012 at 9:58pmi got a plan. move to puerto rico, denounce citizenship, marry a puerto rican (latinos are better looking anyways), become puero rican, and then work in puerto rico for an american company without having to pay income tax. when i want to move back to america, we will have a baby and have no problem cominb back in. And with all that, i will still be voting in the republican primaries….suckers!
Report Post »Partygirl
Posted on April 2, 2012 at 11:27pmThey are also eligible for welfare, rental assistance, medicaid and food stamps. You name it. They are considered United States citizens. And they pay no taxes. Interesting.
Report Post »FN-FEDUP
Posted on April 2, 2012 at 9:10pmthis is not a gimmick IM trying to get mine resolved as i type some one in Dallas stole my ID and the worst part if i did not catch it and they cashed the check with my name and ss# i would have to pay it back to the sum of $7.000.00 dollars not Pecos… dollars
Report Post »workinghard
Posted on April 2, 2012 at 9:03pmHow do you get a refund when you never paid anything in? That’s right. The Earned Income Tax Credit. Otherwise known as welfare to the working poor, or not working if you just file a fake return. Since it’s inception the rules have gotten more relaxed and the penalty for fraud reduced. It’s simple really. File a fake schedule c, claim somebody else’s kids, lie about your new small business making about $8000 and you fall in the EITC guidelines for the maximum credit. For the first time the IRS has the burden of trying to prove you DIDN”T make the money.
Report Post »objectivetruth
Posted on April 3, 2012 at 9:20amYou are speaking the gospel.I hate that credit.I also hate the dependency exemption actually even more.Little fiduary fraud and you can claim someone as your dependent whether they are or not.Invent a medical issue that ordinarily would qualify them for disability [if they only actually had it].What happens if someone gets suspicious?Thats easy just take it into a court they aren’t subject to.Pay a doctor to use the medical excuse as entry for treatment in order to inflict the appearence of the disease or condition.By using household chemicals broken glass exc the individual [they hope eventually]will get sepsis and die.Usually the perps then cash in on the life insurance that they took out.No fuss no muss or so they think.
Report Post »This can be used by terrorists tax cheats and any other passive agressive piece of filth with an ax to grind or not.
objectivetruth
Posted on April 3, 2012 at 9:27amMy reply to yours should show shortly.If you only knew the half of it.After my post you will.Well unless the moderators decide against it.If they do it only goes to prove my point that the real criminals are in charge and are determined for you or anyone else will not find out what they are doing.
Report Post »psadie
Posted on April 2, 2012 at 9:00pmIF all of our agencies were doing their jobs and watching for fraud and theft instead of brutalizing regular American citizens, this wouldn’t happen. I guess no one was checking anything other than hitting the button to send.
Report Post »black9897
Posted on April 2, 2012 at 9:05pmHahahah. The criminals who steal getting money stolen from them. I love it.
Report Post »Archstone
Posted on April 2, 2012 at 8:51pmSounds like Obama spreading the wealth around to me.
Report Post »Darla_K
Posted on April 2, 2012 at 8:42pmThey let illegals enter our country and do nothing about them getting free medical, schooling, welfare, drivers liscense and more. Why would these criminals collecting money from us the tax payers be any different? We have shown our lack of enforcing the law.
Report Post »sawbuck
Posted on April 2, 2012 at 8:39pmI’m wondering how this scam is going to be used ,
so they can persuade the Puerto Rican Citizens,
to become the 51 State…?
I’m just wondering here.
How to become a State.. Of the U.S.A.
1)A territory petitions Congress.
Report Post »2)The dependent area drafts a constitution with a republican form of government.
3)Congress must approve statehood by a simple majority.
4)The President must sign the bill.
LobsterBoy
Posted on April 2, 2012 at 8:30pmPlease raise my taxes so my hard earned money can go to cover this type of waste and stupidity.
Report Post »oldguy49
Posted on April 2, 2012 at 8:52pmhow about getting the money back and giving this taxpayer a refund
Report Post »Psalm91
Posted on April 2, 2012 at 8:30pm……..I‘m absolutely certain that it’s just a coincidence that the involved states are strongly democratic.
Report Post »Hobo Gator
Posted on April 2, 2012 at 8:25pmWe know what is best for you. You are busy working, paying your taxes, and we will help you but making all your decisions in your best interest. Trust us, we are the government. We will spend your money wisly. Don’t worry, we are the government.
Report Post »The cable guy
Posted on April 2, 2012 at 8:25pmWhy do they say the IRS was scammed out of billions. The IRS don’t have any money, the 47 or 46 percent of us who pay taxes were scammed out of the money. The IRS was the government agency that allowed it to happen.
Report Post »OklahomaBound
Posted on April 2, 2012 at 9:00pmExactly, but you have to remember that government thinks OUR money is actually THEIR money.
Report Post »HorseCrazy
Posted on April 2, 2012 at 8:24pmFLAT TAX flat tax flat tax. who gets a refund anyways I havent seen one since I was 18 working 3 jobs and putting myself through school…everyone needs to be paying taxes no free rides enough with the deductions just a flat tax how much would ridding ourselves of the irs save? oh and for the hippies how much paper would it save to not be printing all of these forms duplicating receipts for our own records etc shouldnt we just save the trees liberals
Report Post »oldguy49
Posted on April 2, 2012 at 9:20pmdon’t forget a very important item that needs to go with flat tax……balance budget …… and forgot ……….term limits
Report Post »soybomb315
Posted on April 2, 2012 at 10:42pmi’ll say it again…if you like the flat tax, then mitt romney is NOT your guy
Report Post »tp://cnsnews.com/news/article/romney-taxes-i-want-make-sure-we-maintain-progressivity-code
13th Imam
Posted on April 2, 2012 at 8:24pmYeah, I know Barry, George Bush personally swore in those three postal workers.
Report Post »term limits for congress
Posted on April 2, 2012 at 8:23pmDon’t worry – Eric Holder will fix this.
Report Post »SlyFox123
Posted on April 2, 2012 at 8:21pmHua…….., the IRS has been scammed…..excuse me!. We the American tax payer have been scammed, the IRS had the money, does ANYONE again with half a brain, really think that the IRS, with all of it’s power to {take you home, your wrist watch, you car, just take stopping short of tour birth day} has been scammed…..ha,ha,ha,ha. Again, NO THEY HAVE NOT BEEN SCAMMED WE THE U.S. Tax payers have been “jacked”. “If, I help him, he’ll help me, I’ll not have to pay rent, I’ll get a free cell phone, etc,etc, thats where ALL of that tax money has gone….fot the FREE, stuff because of “I, help him, and guess what HE has repaid them folks back”!.
Report Post »hatchetjob
Posted on April 3, 2012 at 12:01pmYou said that right, we are the ones being scammed.
Report Post »Darmok and Jalad at Tanagra
Posted on April 2, 2012 at 8:19pmWhat, they discoved the Stimulas? They discovered Solyndra? They discovered the Dept. of Education? They also buy Extendze and swear it works, and that there is a magic pill that makes you fat go away without changing your diet and exercise.
Hey, I got a bridge to sell you.
Report Post »myptofvu
Posted on April 2, 2012 at 8:51pmCool Name
Report Post »Sirfoldallot
Posted on April 2, 2012 at 8:14pmToday’s saying is “ Crime does pay ”
Report Post »Maximus_Delta
Posted on April 2, 2012 at 8:14pmthis is why we need a FLAT tax and be done with the IRS….
Report Post »teamarcheson
Posted on April 2, 2012 at 8:23pmIf IRS Victim Of Fraud Its Because The IRS Was A Willing Victim.
The IRS will deliberately look the other way if blacks can cheat as was done with the 40 acres and a mule rebate when Clinton was President. The IRS paid out the money without batting an eye.
Report Post »doomytram
Posted on April 2, 2012 at 8:08pmNo duh, massive disastrous fraud #1 is Barrack Hussein Oblamer.
Report Post »