Crime

Feds bust 40 suspects in ID theft-fraud takedown in South Florida

U.S. Attorney for the Southern District of Florida, Wifredo Ferrer, foreground, gestures as he speaks during a news conference announcing the results of an operation by the South Florida Identity Theft Tax Fraud Strike Force, against identity theft refund schemes, Thursday, April 9, 2015, in Miami. Federal investigators say 42 people in South Florida have been charged with identity theft and fraud that involved intended losses of $21 million.
U.S. Attorney for the Southern District of Florida, Wifredo Ferrer, foreground, gestures as he speaks during a news conference announcing the results of an operation by the South Florida Identity Theft Tax Fraud Strike Force, against identity theft refund schemes, Thursday, April 9, 2015, in Miami. Federal investigators say 42 people in South Florida have been charged with identity theft and fraud that involved intended losses of $21 million. AP

At the start of 2015, a local police officer reported that his own identity had been stolen and used to obtain fraudulent unemployment benefits from the state.

That tip led federal agents to a Miami Gardens residence, where they found lists with names, birth dates and Social Security numbers stolen from more than 1,000 people, authorities say.

On Thursday, the U.S. attorney’s office spotlighted the arrests of Miami Gardens brothers Densom Beaucejour and Winzord Beaucejour — among 42 defendants recently charged — to dramatize the spread of ID theft-related crimes in South Florida.

The Beaucejours, both in their early 20s, were charged with conspiring to use stolen IDs for submitting bogus federal income tax returns. But that wasn’t all. They’re also accused of seeking false state tax refunds in Ohio and filing bogus unemployment claims in Florida.

U.S. Attorney Wifredo Ferrer said that as investigators have begun targeting the “persistent and pervasive threat” of income-tax fraud over the past three years, the crooks have diversified into other criminal schemes, even outside of Florida.

“As the heat has been going up on stolen identity-tax refund fraud, the bad guys ... still need to find other targets to use those stolen identities,” Ferrer told reporters at a press conference. “The new crime du jour is unemployment insurance claims.”

Ferrer also cited credit card, debit card and Social Security fraud among the newer offenses charged in the latest takedown of ID theft offenders. His announcement was designed to heighten awareness of the spreading problems in the run-up to the tax-filing deadline on April 15.

Collectively, the various defendants used tens of thousands of stolen IDs to try to collect about $22 million in tax refunds and other government benefits from the Treasury Department, Florida and other states, such as Ohio, Michigan and Texas, according to the U.S. attorney’s office. Of that total, $3.2 million was paid out — most in IRS-issued tax refunds but also $656,000 in state unemployment benefits.

The force behind the fraud is still the same. For the past four years, Florida has been 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” for these offenders, who buy lists of 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.

“It is frustrating and frightening to think that someone else has your personal identification,” said Kelly Jackson, special agent in charge of the IRS criminal investigations, noting the problem has spread from Miami-Dade and Broward counties into Palm Beach County.

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.”

But on Thursday, Ferrer and other local, state and federal officials focused on criminal cases that revealed new trends.

Among them: Leonce Jeudy, 24, of Plantation, is charged with using stolen IDs to commit income tax, unemployment and credit card fraud. He’s also charged with drug dealing, possession of a firearm and ID theft.

Earlier this year, after a traffic stop, Sunrise police officers obtained a search warrant for Jeudy’s residence. Court records show officers found thousands of stolen IDs and more than 100 credit and debit cards — along with an AK-47 rifle, ammunition, methamphetamine and other drugs.

Eighteen of the recovered debit cards showed that Jeudy received $30,000 in false tax refunds and two other cards revealed fraudulent unemployment insurance payments.

The head of the Florida Department of Economic Opportunity, which handles unemployment insurance benefits, said fraudulent claims “have reached crisis levels.”

DEO’s executive director, Jesse Panuccio, said that in the past year detection efforts uncovered and halted 97,000 fraudulent claims worth more than $400 million.

But Panuccio said that a fraction of the false unemployment claims can slip through the system because of the sheer volume.

There’s also another factor: the state agency routinely contacts employers to verify the past employment of purported claimants, but they don’t always get back to the state in a timely fashion.

“The employer gets a notice,” he said, “but the employer doesn’t always respond quickly.”

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