Richard Lee Derrick Jr, Tax Return Identity Theft, HI 2024

HONOLULU — Richard Lee Derrick, Jr., 52, of Honolulu, Hawaii, is headed to federal prison for 24 months after being sentenced on January 10 for a brazen scheme involving fraudulent tax returns filed with stolen personal information, including that of the dead. The case, prosecuted by the U.S. Attorney’s Office for the District of Hawaii, lays bare a cold exploitation of identity theft for financial gain.

Court documents reveal Derrick orchestrated a methodical fraud operation, submitting multiple false federal and state income tax returns using the personal data of others. On September 19, 2016, he pled guilty to aggravated identity theft, admitting in court to filing a fraudulent federal return using his deceased wife’s Social Security number on February 20, 2014. The act wasn’t isolated—he admitted to being responsible for siphoning $241,897.60 in fraudulent refunds from the State of Hawaii Department of Taxation.

During sentencing, U.S. District Judge Derrick K. Watson didn’t mince words. He called Derrick’s use of deceased victims’ identities particularly ‘sinister,’ emphasizing that the dead cannot monitor their credit, dispute charges, or defend themselves. ‘This isn’t just about stolen money,’ Judge Watson said. ‘It’s about violating the dignity of people who can’t fight back and leaving wreckage in their financial wake.’

Victims of identity theft often face months, even years, untangling false accounts, credit damage, and bureaucratic nightmares. Judge Watson underscored that the crime extends far beyond the dollar amount, eroding public trust and overburdening state systems designed to serve legitimate taxpayers. The emotional and administrative toll, he noted, is rarely accounted for in sentencing—but it should be.

In addition to the 24-month prison term, Judge Watson ordered full restitution: $241,897.60 to be paid to the State of Hawaii Department of Taxation. Derrick will also face supervised release upon completion of his sentence, during which any financial activity will be closely monitored. Authorities say the case exemplifies how identity thieves exploit both bureaucratic loopholes and human tragedy.

The investigation was led by the Internal Revenue Service – Criminal Investigation, the Social Security Administration’s Office of Inspector General, and the U.S. Postal Inspection Service, with critical support from the State of Hawaii Department of Taxation’s Criminal Investigation Section. Assistant U.S. Attorney Amalia Fenton prosecuted the case, calling it a ‘textbook example of financial predation cloaked as tax filing.’ # # #