Feds round up 50 suspects in latest ID theft-tax fraud sweep in South Florida

Feds round up 50 suspects in latest ID theft-tax fraud sweep in South Florida

Federal agents arrested about 50 people on identity theft and tax fraud charges across South Florida over the past week, including a Miami man accused of breaking into an Internal Revenue Service database to steal supposedly secret information from taxpayers and file fraudulent refund claims in their names.

It’s the latest scheme in a long-festering problem that costs the IRS billions of dollars a year nationwide.

U.S. Attorney Wifredo Ferrer on Thursday called the breach of the government website particularly “brazen” because the perpetrator used the “personal and financial blueprints” of law-abiding taxpayers to “commit more fraud.”

Marvin Ricardo Herard, 26, was charged with breaching an IRS database called “Get Transcript,” a repository of millions of current tax returns, according to authorities. In turn, he and his co-conspirators allegedly stole the personal information of taxpayers and filed false returns in their names seeking thousands of dollars in refunds for each one.

Other unnamed co-conspirators are expected to be arrested in connection with Herard’s alleged wire-fraud racket. The IRS electronically issued refunds under stolen names into bank accounts and pre-paid debit cards controlled by his ring, authorities said.

Herard, arrested Tuesday, could not be reached for comment. He is among various perpetrators across the country who broke down security barriers by using taxpayers’ names, Social Security numbers and dates of birth to gain access to the supposedly secure IRS website, according to authorities. The site is normally available to legitimate taxpayers seeking information about their personal tax records.

The IRS shut down the site in May, following the tax-filing season. The agency acknowledged that more than 300,000 “suspicious” attempts succeeded in gaining access to the “Get Transcript” site and more than 280,000 failed.

The website is still unavailable for taxpayers seeking to obtain their records electronically, but they can use it to order them by mail.

Ferrer — flanked at a news conference by officials with the IRS, FBI, Homeland Security, U.S. Postal Inspection Service and other law enforcement agencies — said his office has targeted perpetrators who have stolen identities to rip off not only the IRS but also the Social Security Administration, state of Florida, major banks and department stores. He highlighted some of the 50 cases filed in recent weeks by his office, accusing about 60 defendants of trying to steal a total of $38 million.

“Unfortunately, identity theft is not going away,” said Kelly Jackson, special agent in charge of the IRS’ criminal investigations. “It is here to stay.”

For the past four years, Florida has ranked No. 1 in the country for identity theft, according to complaints compiled by the Federal Trade Commission. South Florida’s ID-theft rate is twice that of the rest of the state.

Ferrer said stolen IDs are the “new crack cocaine” of offenders, who buy lists of stolen names, dates of birth and Social Security numbers from insiders at hospitals, medical offices and schools, among other places. Florida, Georgia and the District of Columbia have emerged as national hot spots for ID theft-related crimes, especially tax-refund fraud.

Beginning in 2010, IRS criminal investigators, working with local and federal authorities, began targeting the crime. But the numbers show it remains very much a growth industry.

Nationwide, the IRS estimated it received 5 million returns with stolen identities, totaling $29.4 billion in fraudulent refund claims during the 2013 filing season, according to the latest Government Accountability Office report. Of that total, the agency estimated it paid 900,000 bad refunds totaling $5.2 billion.

“However,” the GAO report cautioned, “the full extent of [identity-theft] refund fraud is unknown.”
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