Feds charge 40 in ID theft-tax fraud takedown in South Florida

 

Federal authorities charged 40 South Florida defendants with identity theft and income tax fraud in a major crackdown on the “epidemic” crime.

Federal authorities Wednesday escalated their assault on the double-barreled crime of identity theft and tax fraud, arresting 30 South Florida suspects — including a Miami Gardens man facing a murder trial — on charges of filing fake returns totaling millions of dollars.

Prosecutors in Miami unveiled charges against a total of 40 defendants accused of stealing the personal information of roughly 54,000 people and using it to file fraudulent income-tax refund claims with the Internal Revenue Service.

One defendant obtained the Social Security numbers of 26,000 people by searching a public database, according to court records. A separate group of defendants filed phony returns in the names of 5,000 people — nearly all of whom were dead — and received $6 million in IRS refunds.

“Identity theft and tax-refund scams are nothing less than a tsunami of fraud that is barreling toward us,” U.S. Attorney Wifredo Ferrer said at a news conference, pointing out that gang members, drug traffickers and violent criminals have become the face of “one of the fastest-growing and most pervasive problems in the United States.”

Among those arrested Wednesday: Lineten “Link” Belizaire, who was charged in August with the Lauderdale Lakes killings of two women and a baby. He had been out on bond awaiting trial in Broward County.

Belizaire, 21, of Miami Gardens, has pleaded not guilty in the January shooting deaths of Octavia Barnett, 21; Barnett’s roommate, Natasha Plummer, 25; and Plummer’s 6-month-old boy, Carlton Stringer Jr.

Ferrer said the murder prosecution was unrelated to Belizaire’s federal indictment, which accused him and three partners of submitting hundreds of bogus tax refund claims totaling $1 million and requesting that payments be made on pre-paid debit cards over the past year.

Ten of the 40 defendants indicted remained at large, officials said.

Wednesday’s takedown by a new South Florida task force — involving the IRS, FBI, Secret Service, U.S. Postal Inspection Service and local police departments — follows a Justice Department edict on Oct 1. It gave authorities at the local level greater leeway to pursue tax-fraud offenders who swipe other people’s identities to fleece the federal government.

Victims have ranged from South Florida police officers to Holocaust survivors to U.S. Marines stationed in Afghanistan.

“We know that identity theft and tax fraud has turned the lives of taxpayers upside down,” said Jose “Tony” Gonzalez, special agent in charge of the IRS’ criminal investigations unit in Miami.

He said the IRS is developing software “filters” to detect phony claims, but that the agency is also under constant pressure to issue refunds as quickly as possible to legitimate filers. “We have to be careful and not delay refunds to innocent taxpayers,” he said.

The twin problems of ID theft and tax fraud have become so widespread in the Internet age that an inspector general for the Treasury Department recently issued a report on the crisis. The report found the IRS paid out more than $5.2 billion in tax refunds to fraudsters who filed about 1.5 million fake returns using the stolen identities of other people. The report predicted that scammers are likely to swindle $21 billion more from the IRS over the next five years.

Among major U.S. cities with the most fraud-related tax filings: Tampa (88,724 returns, with refunds of $468 million); Miami (74,496 returns, with refunds of $280 million) and Atlanta (29,787 returns, with refunds of $77 million).

At the news conference, authorities said the Miami area’s per capita number of false returns based on identity theft was 46 times the national average, and its per capita value of fraudulent refunds was 70 times the U.S. average.

Michael Steinbach, head of the FBI’s Miami office, said the crime has “reached an epidemic level” in recent years. He cautioned the public to safeguard their Social Security numbers, ignore email scams, and tear up personal financial information before putting it in the trash.

At the root of the problem: Scammers filing fabricated tax returns have exploited a hole in the IRS electronic filing system, according to the U.S. Government Accountability Office.

The federal watchdog agency found that the IRS does not match tax returns to the W-2 income forms that employers file until months after the filing season ends on April 15. Employers file them in late February or early March; the IRS does not match them up with employees’ incomes reported on 1040 forms until June.

That’s way too late to catch identity thieves who file false returns in other people’s names early in the year and have already received and cashed the refund check.

So far this year, a total of 79 South Florida defendants have been charged with filing $40 million in fraudulent refund claims through identity theft, according to the U.S. attorney’s office.

Among the major cases unsealed Wednesday: A three-person ring — Serge St-Vill, 62, of Miami, Muller Pierre, 62, of North Miami Beach, and Finshley Fanor, 34, of Lauderhill — submitted thousands of tax returns in the names of mostly dead people, seeking $14 million in fraudulent refunds, according to an indictment.

The most prominent defendant charged this year has been William Joseph, a former University of Miami defensive tackle who played in the NFL for much of the past decade, who pleaded guilty in August to tax-fraud charges.

Joseph, 32, of Miramar, admitted cashing a $10,088 Treasury Department refund check in the name of a person with the initials “I.P.” at a check-cashing store in North Miami in April, according to his plea agreement.

Unbeknown to him, the store was a front for an FBI undercover operation.

At Wednesday’s news conference, the U.S. attorney also highlighted his office’s most tragic case: Last month, a federal jury found a Miami-Dade man guilty of fatally shooting U.S. postal carrier Bruce Parton in December 2010 as part of a plot to steal people’s identities and file fraudulent income-tax refunds in their names.

The jury found that Pikerson J. Mentor, 30, killed Parton, 60, of Pembroke Pines, for his master key so that he and a partner could access mailboxes — and the personal financial information inside the mail — belonging to residents of North Miami-Dade apartment complexes.

Victims of ID theft and tax-refund fraud should contact the IRS through its website, www.irs.gov.

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