40 Charged in Separate Schemes that Resulted in Thousands of Stolen Identities, Millions in Fraudulent Tax Filings

Thursday, October 11, 2012
Office Affiliation: 

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Richard Weber, Chief, IRS-Criminal Investigation Division (IRS-CI), Paula Reid, Special Agent in Charge, U.S. Secret Service, Michael B. Steinbach, Acting Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Antonio J. Gomez, Acting Inspector in Charge, U.S. Postal Inspection Service, Miami Division, Guy Fallen, Special Agent in Charge, Social Security Administration, Office of Inspector General (SSA-OIG), Kelly R. Jackson, Special Agent in Charge, IRS-CI, St. Paul Field Office, Steven Steinberg, Chief, Aventura Police Department, Larry Gomer, Interim Chief, North Miami Beach Police Department, and Juan Santana, Chief, Miami-Dade Police Department, announced the filing of federal charges against 40 defendants in 20 separate cases, dealing with thousands of stolen identities and millions of dollars of fraudulent identity theft tax filings.  Today’s cases reaffirm the joint federal and local commitment to crack-down on stolen identity tax refund (SITR) fraud perpetrators.

According to the Federal Trade Commission, Florida had the highest rate of identity theft in the United States in 2011.  While identity theft in Florida ranks highest in the United States, the identity theft rate in Miami has reached near epidemic proportions.  Florida’s rate of 178 complaints per 100,000 residents – the highest in the United States – is dwarfed by the Miami rate of 324.1 complaints per 100,000 residents. 

Moreover, a September 2012 report by the U.S. Treasury Inspector General for Tax Administration (TIGTA) determined that Florida has the highest rate of stolen identity tax refund fraud in the United States.  The report identified 74,496 potentially fraudulent returns filed in Miami resulting in more than $280 million in bogus refunds. The City of Miami’s per capita number of false returns based on identity theft was 46 times the national average, and its per capita SITR fraud dollar value was more than 70 times the national average.  Worse still, this problem is projected to grow:  the TIGTA report estimates that the IRS could issue as much as $21 billion in fraudulent tax refunds over the next five years. 

 In an attempt to combat the rising wave of stolen identity refund scams, and armed with newly enhanced investigative and prosecutorial tools under the Department of Justice’s Tax Directive 144, the U.S. Attorney’s Office for the Southern District of Florida established the South Florida Identity Theft Tax Fraud Strike Force (Strike Force).  The members of the Strike Force include IRS-CI, U.S. Secret Service, FBI, U.S. Postal Inspection Service, City of Aventura Police Department, Miami-Dade Police Department, North Miami Beach Police Department, and the SSA-OIG.  The focus of the Strike Force is to investigate and prosecute SITR fraud in the SDFL.  Today, U.S. Attorney Ferrer, joined by members of the Identity Theft Tax Fraud Strike Force, announced the most recent results of their investigative efforts.

U.S. Attorney Wifredo A. Ferrer stated, “So far this year, we have charged a total of 79 individuals responsible for almost $40 million in fraudulent tax refunds obtained through identity theft.  The cases being investigated and prosecuted include victims from all walks of life, including police officers, potential U.S. Marine recruits, members of the Armed Forces, holocaust survivors, school children, hospital patients, the elderly and infirm, incarcerated prisoners, and even the dead.  In addition, our cases show a troubling change in the nature of these cases, away from traditional white collar criminals to more violent criminals, like gang members and narco-traffickers, who are using stolen identity refund scams to fuel their other, violent, criminal activities.  We will continue to crack down on identity thieves who are lining their pockets with our tax dollars and using violence to obtain the personal identification information of others.”   

“Today’s announcement should reassure American taxpayers that IRS Criminal Investigation has put into action our pledge to make investigating identify theft and refund fraud a top priority,” stated Richard Weber, Chief, IRS Criminal Investigation.  “Be assured that we are serious about investigating these crimes and, as we capitalize on the collective strength of the

Identity Theft Tax Fraud Strike Force, we will succeed in vigorously pursuing the criminals who steal from the American taxpayer.”

“The U.S. Secret Service is glad to be an integral part of the Strike Force coordinated between the U.S. Attorney’s Office and the Internal Revenue Service to combat this fraud scheme that is plaguing South Florida.”

“Identity theft tax fraud has reached an epidemic level and these cases demonstrate that the FBI and its law enforcement partners will devote considerable resources to address the issue,” said Michael B. Steinbach, Acting Special Agent in Charge, Federal Bureau of Investigation.  “Prevention by way of educating the public is also key to reducing the amount of this type fraud.  Consequently, we urge the public to visit www.ftc.gov or www.ic3.gov, as it provides detailed information on how to help deter, detect, and defend against identity theft.”

Antonio Gomez, Acting Inspector in Charge of the Miami Division of the U.S. Postal Inspection Service, added, “As a member of the Identity Theft Tax Fraud Strike Force, the U.S. Postal Inspection Service will work diligently with the U.S. Attorney’s Office and with law enforcement at the federal, state and local level to protect American citizens from suspects who prey on their identification for financial gain.  Our commitment to the South Florida community is to continue to pursue these cases under Mr. Ferrer’s leadership and guidance so that the U.S. Mails are never used as a conduit to defraud unknowing victims of this type of crime.”

Guy Fallen, Special Agent in Charge of the SSA-OIG, added “Assuming the identity of another to commit fraud, unfortunately, is a common occurrence.  SSA-OIG special agents are well-trained to detect, investigate, and locate identity thieves, and SSA/OIG, in concert with the U.S. Attorney’s Office, will investigate and prosecute those who commit identity theft and defraud Social Security trust funds.”

“It is through the collaborative efforts of our agencies that we have been successful in investigating and prosecuting tax fraud in Miami-Dade County.  We are pleased with the outcome and will continue to work together with our partner agencies in order to make positive impacts on our community,” said Chief Juan Santana of the Miami-Dade Police Department.