Income Tax Refund Fraud Cases Growing

Income tax fraud is nothing new, but it certainly is booming over the past few years, and the headlines and news briefs are rife with cases from around the country.

As has been widely documented, Florida has really taken the prize as the leading state for income tax fraud, mostly related to thieves or gangs who start with identity theft to file fake returns for hundreds or thousands of people. And if Florida is tax fraud nation, then Tampa is the capital city, with dozens of high profile cases this year, plus a couple of new ones this week.

TAMPA – The Tampa Tribune reported on Tuesday that a woman was sentenced to nine years in prison for acting like she was helping them with their finances or taxes, but then using that information to drain their bank accounts and file fraudulent taxes. The judge also ordered Iris D. Locklear, 59, to pay $249,000 in restitution and $66,000 to the IRS.

TAMPA – The Tampa Tribune also reported that A Florida car dealer has pleaded guilty and received a 15-year sentence for tax fraud totalling almost $9 million, telling the judge hearing the case “that he did it all for his family.”

Russell B. Simmons Jr., 42, the owner of a used auto dealership in Tampa, was accused of filing more than 600 fraudulent returns that would have resulted in $8.9 million in refunds. The returns were in the names of mostly elderly people over 80 years old.

The IRS did catch most of the returns ($5.5 million worth) before paying out money, and Intuit’s TurboTax software also prevented some of the returns, but he was still able to receive about $1.8 million before being stopped.

Although investigators showed that he used some of the money “to buy a $60,000 Bentley coupe and tens of thousands of dollars in diamond jewelry,” Simmons said he’s not a bad person. “It just took a lot out of me as a man, and I was wrong,” he told the judge. “I admit it. 100 percent wrong. I got caught up.”

MIAMI – The U.S. Attorney for the Southern District of Florida issued a news release stating that defendant Lineten Belizaire, 22, of Miami, pled guilty today for his role in a stolen identity tax refund scheme.

More specifically, Belizaire pled guilty to conspiracy to defraud the government and one count of aggravated identity theft. Sentencing is scheduled for May 28, 2013, where he faces a possible statutory maximum sentence of up to 12 years in prison.

According to prosecutors, he used stolen personal identification information of others to file fraudulent and unauthorized tax returns claiming refunds on debit cards. Belizaire exchanged personal identification information of victims by text message for use in the tax refund fraud scheme.

During a traffic stop conducted on January 31, 2012, law enforcement found notebooks and papers containing personal information on more than 1,000 victims and approximately 40 prepaid debit cards, including some of the identities exchanged by Belizaire. In addition, more than 80 fraudulent tax returns using stolen identifications were electronically filed from the IP address belonging to the defendant. The defendant was also observed on ATM video withdrawing money on multiple occasions from debit cards loaded with fraudulent tax refunds.

KNOXVILLE, TENNESSEE

A Tennessee couple is now on trial for tax fraud the IRS claims cheated the government out of almost $600,000, and attempted to file false returns totalling $1 million. The couple’s defense: As “sovereign citizens” they are not subject to the federal laws of the United States or the taxation of the IRS. It’s probably not too difficult to guess how the courts will receive that argument. LOL.

The case against engineer James E. Beavers and his wife Beverly S. Beavers is based on the prosecution’s charges that the couple used a tax preparer with a known history of tax fraud to claim credits and deductions they were not entitled to. They even went so far as creating fake forms that showed about $1 million had been withheld from non-existing investment income.

The couple is representing themselves in court, but during the first day of their trial they “refused to make opening statements or question witnesses,” according to the Knoxville News.

One twist to the case that prosecutors said they don’t usually face with “sovereign citizen” defenses is that the Beavers are more highly educated than others. James Beavers holds a doctorate degree in engineering from Vanderbilt University and previously taught at the University of Tennessee. Mrs. Beverly owned a dress boutique.