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Tax Return Fraud a Thriving Business in Florida

According to the Federal Trade Commission, Miami is the nation’s leader in identity theft complaints, with 340 victims per 100,000 Florida residents. Furthermore, the U.S. Treasury inspector general for tax administration has reported that in Miami, the number of fraudulent Internal Revenue Services (IRS) tax returns submitted per capita via identity theft is 46 times higher than the rest of the country. In fact, the recent Higher One identity theft fraud at Miami Dade College has revealed that fraudsters are supplementing their incomes by fraudulently obtaining funds through identity theft, instead of through gainful part-time employment. Eighteen former and current Miami Dade College students were charged in federal court because of their participation in a mass stolen identity scam that is believed to have netted an estimated $500,000 in fraudulent income-tax refund payments.

Tax Fraud by Miami Residents

Not only youngsters are involved in the rampant identity theft and tax fraud in Florida. In fact, two middle-aged former senior executives of TigerDirect, a Miami-based electronics retailer, pled guilty to both tax and securities fraud. The former CEO of TigerDirect, along with his brother, the former TigerDirect president, were recently charged in federal court for their participation in a $9.5 million bribery scheme. According to federal court documents, between 2003 and 2011, the illegally obtained funds from bribery were used to purchase luxury homes and goods. In addition, the president was charged with tax evasion for attempting to conceal the illegally obtained payments in tax returns submitted to the IRS.

Another tax fraud scheme perpetrated by Miami residents has recently been in the news. This December, two Miami men pled guilty to committing federal identity theft in the St. Louis District Court; one of the defendants also pled guilty to charges of conspiracy to illegally obtain government funds. In this tax fraud scheme, the defendants stole the personal identity information of over 400 people during the years of 2011 and 2012. After illegally obtaining the personal identity information, the defendants filed fraudulent tax returns in the victims’ names. The total amount for the fraudulent tax returns submitted was $2.25 million in refunds, though only $500,000 was actually paid out.

In the face of such rampant tax fraud in Florida, many wonder how these fraudsters were able to receive such large amounts in refunds before being caught. However, the reality is that the IRS is facing serious staffing constraints and is overwhelmed by the sheer amount of tax returns it receives each year. The limitations of the IRS have made it somewhat difficult for the IRS to weed out abnormal and multiple electronic refund transfers to the same bank accounts. In fact, in the case of the Higher One fraud, the IRS failed to notice the deposit of 37 separate refund payments into one student’s account. However, in the Higher One scam, the IRS was still able to reject 90% of the submitted claims in the scam as a result of suspicions that tax fraud was being committed.

In Miami, tax fraud and identity theft are lucrative businesses. However, because such fraud is often commenced at a national level, and tax payments and regulations come from the federal government, the punishment for such crimes can be more severe than what would be imposed at a state or local level. As a result, you should contact criminal defense attorney Jeffrey S. Weiner, P.A. in Miami, Florida for the legal representation that you require in a tax fraud suit, or any other criminal case.

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