Tax fraud schemes spun so wildly out of control at Miami Dade College that federal authorities had to swoop in and freeze more than 1,000 student bank accounts.
The worst offenders — 18 all together — were charged with using their accounts to receive upwards of a half-million dollars in fraudulent income-tax refunds from the federal government, authorities said Tuesday.
The college students, all recipients of financial aid, are accused of collaborating with others in exchange for receiving kickbacks ranging from $100 to $1,000 for each successful return filed fraudulently with the Internal Revenue Service between 2011 and 2013. Some students acted as recruiters who lured their colleagues into the schemes.
Most of the defendants were arrested by federal agents Tuesday as part of a continuing investigation of ID theft and tax fraud involving more than 1,000 student Higher One accounts, which are normally used for receiving financial aid to pay tuition, authorities said.
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Among them: Laquisha Q. Johnson, 24, of Opa-Locka, received a tax refund of $61,000 in the name of a single victim that was deposited into her account. Another defendant: Glasner Simplice, 20, of Miami, received about $53,000 in tax refunds and an additional $19,000 in Social Security benefits.
U.S. Attorney Wifredo Ferrer said the use of student Higher One accounts to bilk the IRS and innocent taxpayers highlights the “insidious nature” of the twin crimes of ID theft and tax fraud. Annually, they cost the federal government billions of dollars while creating bureaucratic nightmares for legitimate taxpayers whose identities are stolen.
“This sort of scheme is bleeding into college life,” Ferrer told reporters, after announcing fraud and theft charges brought against a total of 21 defendants. “Allowing their accounts to be used for this purpose is not only wrong but it is criminal and will ruin their lives.”
Ferrer — joined by IRS, FBI and U.S. Postal Inspection Service agents — said that such tax fraud schemes are not unique to Miami Dade College, noting they have spread in recent years to other colleges and universities in Florida.
Tuesday’s take-down is the latest in a series of law enforcement operations to confront the persistent problem of identity theft and tax fraud in South Florida, which ranks No. 1 in the country for these types of offenses. While authorities and the IRS have developed more sophisticated methods to stop fraudulent refunds and catch offenders, perpetrators have devised new schemes to fleece the tax collection agency.
One of the latest, authorities said, has been the exploitation of Higher One accounts on college campuses. The accounts, named after the company that provides the service, are normally used to receive financial aid, refunds or other disbursements. But at Miami Dade College dozens of students got caught accepting kickbacks while allowing their accounts to receive multiple electronic tax refunds from the IRS.
The 21 defendants, three of whom were not enrolled at the college, were charged in 14 separate cases, implicated in schemes seeking $1.9 million in fraudulent refunds. Those returns, filed in the names of 644 taxpayers whose Social Security numbers were stolen, yielded $494,000 in IRS refunds.
“Unfortunately, South Florida’s citizens have been victimized the worst,” said Kelly Jackson, special agent in charge of IRS criminal investigations in South Florida.
Miami Dade College spokesman Juan Mendieta issued a statement, saying “the actions of these [18 defendants] are in no way a reflection of the vast majority of the hardworking, honest students” at the school.
“It’s also important to note that what has reportedly transpired is not a result of a lack of vigilance and proactiveness on the part of the college,” Mendieta said. “We look forward to a thorough review and resolution of this matter and are working closely with the U.S. Attorney’s Office.”
That Miami-Dade College became another venue for tax fraud was perhaps inevitable.
It’s everywhere in South Florida. Among those whose identities have been stolen for filing bogus refund claims: Police officers, U.S. Marines stationed in Afghanistan, hospital patients, senior citizens, even Holocaust survivors.
Perpetrators routinely steal the names, dates of birth and Social Security numbers of people, including prisoners, the poor and even children. They are attractive targets because they don't file income tax returns.
Anyone with information about suspected ID theft and tax fraud activity may call IRS criminal investigators at 305-982-5151.