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Tax Refund Fraud: A Growing Concern in Kentucky
In a disturbing trend, identity thieves have been targeting unsuspecting taxpayers in Kentucky, filing false tax returns and stealing millions in refund money. The Justice Department has been working tirelessly to combat this crime, and their efforts are beginning to pay off.
The Tax Division, in conjunction with the Internal Revenue Service (IRS) and U.S. Attorneys’ Offices nationwide, has prioritized the investigation and prosecution of individuals who engage in stolen identity refund fraud (SIRF). According to the IRS, from 2008 through May 2012, the IRS identified more than 550,000 taxpayers who have had their identities stolen for the purpose of claiming false refunds in their names.
One of the most recent cases to make headlines involves Vernon Harrison, a corrupt U.S. Postal Service mail carrier who was sentenced to serve 111 months in prison in October 2013. Harrison had been using his position to steal tax refunds from unsuspecting taxpayers on his postal route in Montgomery, Ala.
Another case involves Lea’Tice Phillips, who worked for an Alabama state agency and had access to databases that contained personal identifying information. Phillips conspired with Antoinette Djonret and others to file false tax returns using identities stolen from the database. Djonret filed over 1,000 false tax returns that claimed over $1.7 million in fraudulent tax refunds. She was sentenced in February 2013 to serve 12 years in prison, while Phillips was sentenced in September 2013 to serve 94 months in prison.
The Justice Department is committed to stopping this crime at the door and bringing perpetrators to justice. Assistant Attorney General Kathryn Keneally for the Justice Department’s Tax Division said, “Too often the victims of identity theft are the most vulnerable in our communities – those whose identities are stolen from medical services or nursing homes, or grieving families who learn that the identities of deceased loved ones have been fraudulently used – and all honest taxpayers are victims when wrongful refund claims are paid out.”
The actual implementation of SIRF schemes is often complex and difficult to carry out. In an increasing number of cases, the identities are stolen or bought in one place; the returns are electronically filed from another location, often through difficult to trace Wi-Fi connections; refunds are directed to a distant location; checks are cashed in yet another location; and the currency then moves again.
As the Justice Department continues to crack down on this crime, it is essential that taxpayers remain vigilant and take steps to protect their personal identifying information. By working together, we can prevent identity theft and ensure that honest taxpayers receive the refunds they deserve.
Key Facts
- State: Kentucky
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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