Former Merrill Lynch Financial Advisor Arrested in Alleged Embezzlement Scheme

August 10, 2012

The Federal Bureau of Investigation (FBI) on August 9, 2012 released the following:

“TALLAHASSEE—Today James Ryan Lanier, 33, was arrested in San Diego, California, on fraud, money laundering, and identity theft charges relating to the embezzlement of more than $800,000 in funds from Merrill Lynch clients.

The 65-count indictment alleges that between 2008 and 2010, while working as a financial advisor at Merrill Lynch, Lanier transmitted fraudulent letters of authorization bearing forged client signatures to Merrill Lynch client associates who were responsible for processing wire transfers of client funds. The letters contained false and misleading statements designed to induce the client associates to wire transfer funds from client investment accounts to bank accounts held and controlled by Lanier. According to the indictment, Lanier purposely sought assistance from client associates who were unfamiliar with Lanier’s clients. In directing the transfers of these funds, Lanier falsely claimed that he had obtained voice approval from Merrill Lynch clients on a recorded telephone line. As alleged in the indictment, Lanier used the embezzled client funds to make loan payments and to purchase vehicles and a condominium in Albany, Georgia, as well as an interest in a cellular telecommunications business.

If convicted, Lanier faces maximum sentences of 30 years in prison on each count of wire and mail fraud and a maximum sentence of 10 years in prison for money laundering. If convicted of aggravated identity theft, Lanier faces a separate mandatory minimum sentence of two years in prison, which must be served consecutively to any other sentence.

Lanier will be formally arraigned at an initial appearance currently set for August 16, 2012, at 1:30 p.m., before United States Magistrate Judge Charles A. Stampelos in Tallahassee.

The government’s case is being prosecuted by Assistant U.S. Attorney Jason Coody.

An indictment is merely an allegation by a grand jury that a defendant has committed a violation of federal criminal law and is not evidence of guilt. All defendants are presumed innocent and entitled to a fair trial, during which it will be the government’s burden to prove guilt beyond a reasonable doubt in a court of law.”

Federal Mail Fraud Crimes – 18 U.S.C. § 1341

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

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Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Ex-NFL player pleads guilty to wire fraud in FBI sting

August 8, 2012

Sun Sentinel on August 7, 2012 released the following:

“By Paula McMahon

A former NFL first-round draft pick who was arrested in an FBI fraud sting earlier this year has pleaded guilty to his role in the crime, court records show.

A second former NFL player arrested in the same sting is scheduled for a change of plea hearing next week in federal court in Miami, according to court records.

Former Oakland Raiders running back Michael Antwon Bennett pleaded guilty last week in federal court in Fort Lauderdale to one count of wire fraud.

He was caught in an operation by the FBI, which set up an undercover financial services store in North Miami between February and April. An undercover agent worked behind the counter and the store was equipped with audio and video surveillance equipment.

Bennett, who turns 34 next week, admitted that he had sent an email to the store fraudulently claiming that he had $9 million in the bank so he could obtain a $200,000 loan, court records show.

Bennett went to the store on April 18 and signed a loan agreement to borrow $200,000 and repay $280,000 after three months. When agents checked the bank account, they found that Bennett had opened an account there about a month earlier but it had a zero balance and there had never been any money in the account.

When Bennett returned to the store and picked up a $150,000 cashier’s check on April 30, he was arrested. FBI agents said he admitted that he altered the bank statement to give the false impression that he had millions of dollars in his account.

The maximum penalty for the offense is 20 years in prison and a fine of up to $250,000 but prosecutors have agreed to recommend a punishment on the lower end of the sentencing guidelines, which are still being calculated, when he is sentenced in October.

Meanwhile another NFL player, William Joseph, is scheduled for a change of plea hearing on Aug. 14 in Miami. The terms of the proposed plea agreement will not be made public until the court hearing.

Joseph, 32, of Miramar, was indicted in May on five federal charges including aggravated identity theft, possession of false identification documents, theft of government money and forgery of U.S. Treasury checks.

Federal authorities said Joseph cashed a $10,088 income tax refund check that was not his and that he did not have permission to cash.

Joseph played for the New York Giants between 2003 and 2007, then spent three years with the Raiders.

Former Syracuse player Louis Gachelin, 31, of Miramar, pleaded guilty earlier this year to theft of government money and aggravated identity theft in the same investigation.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Mail Fraud Crimes

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Dutch man charged with allegedly stealing Wash. credit cards

June 12, 2012

Associated Press on June 11, 2012 released the following:

“By MANUEL VALDES
Associated Press

SEATTLE (AP) — In an investigation that spanned from a Seattle restaurant to Romania, a 21-year-old Dutch national pleaded not guilty Monday to federal computer hacking charges that include the theft of at least 44,000 credit card numbers.

Federal prosecutors said David Benjamin Schrooten is a prominent figure known as “Fortezza” in the international hacking community who sold stolen credit card numbers in bulk through websites.

The 44,000 credit card numbers included in these charges come from just one sale, authorities said.

Schrooten was arrested in Romania and arrived in Seattle on Saturday. He has been charged with 14 crimes, ranging from access device fraud to identity theft, authorities said.

“People think that cyber criminals cannot be found or apprehended. Today we know that’s not true. You cannot hide in cyberspace,” said U.S. Attorney Jenny A. Durkan at a news conference. “We will find you. We will charge you. We will extradite you and we will prosecute you.”

A message left with Schrooten’s listed attorney was not immediately returned.

Seattle and federal authorities credited a local Italian restaurant owner for sparking the investigation.

Corino Bonjrada said he became alarmed after several complaints from customers of suspicious charges after dining at Modello Risorante Italiano.

Customers suspected his workers had taken their credit card information and used it, but Bonjrada found no evidence of that. He then called computer experts and eventually the police, he said.

That led police to Christopher A. Schroebel, 21, of Maryland, who they say planted spying malware in the sales systems of two Seattle businesses, two of dozens of businesses targeted. Schroebel had collected at least 4,800 credit card numbers in 2011.

“Some of my customers were saying they didn’t know if they wanted to come back,” Bonjrada said. “They were afraid.”

Schroebel was arrested in November 2011 and pleaded guilty last month to federal charges that included bank fraud. He is set to be sentenced in August.

Investigators said Schrooten worked with Schroebel in creating websites to sell the credit card numbers.

Bonjrada said some customers were charged within “10 minutes” of using their credit card at his restaurants in the amounts of $70 or $80.

Authorities said the investigation into the ring run by Schrooten is continuing.

Schrooten is scheduled back in court Aug. 20.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


4 indicted in alleged student aid scheme that used inmates

May 7, 2012

MyFoxPhoenix on May 7, 2012 released the following:

“PHOENIX (AP) – Federal prosecutors say they have broken up a ring of women who used the names of Perryville prison inmates to fraudulently get federal student financial aid.

The U.S. attorney’s office in Phoenix says three of the women are from Glendale and were arrested on May 2 while the fourth remains a prisoner at Perryville.

Two of the women were charged with dozens of counts of conspiracy, wire fraud, identity theft and theft of public funds.

The indictment says the plan’s architect and ringleader was 32-year-old Elizabeth Meza. Meza allegedly devised the scheme to fill out federal student financial applications and apply for online classes at Rio Salado College in Tempe.

More than $150,000 in loans and grants were approved and about $71,000 was sent to the women or school.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


William Joseph among 3 former football players charged in Florida tax ring

May 3, 2012

CBS News on May 2, 2012 released the following:

“(CBS/AP) MIAMI – Three former professional football players are among eight charged in a South Florida tax refund and identity theft scheme.

Federal prosecutors said Tuesday the FBI operated an undercover check-cashing store in North Miami used by the suspects from February through April. The group allegedly cashed about $500,000 in fraudulent refund checks. The money was paid out of FBI funds and no checks were actually cashed.

Former Oakland Raiders and New York Giants defensive tackle William Joseph is one of the former NFL players arrested. The other is running back Michael Bennett, once a Minnesota Vikings first-round pick who played for several teams. A third ex-player, Louis Gachelin, played professionally in Europe.

According to CBS Miami, Joseph and Gachelin were charged Tuesday with with forgery of U.S. Treasury checks, theft of government money, and use of five or more identification documents with unlawful intent. If convicted they could face maximum prison terms of between five and 15 years in prison.

Bennett was charged with wire fraud after allegedly using a false bank statement in an attempt to obtain a $200,000 loan from the same FBI undercover store, CBS Miami reports. According to the criminal complaint, Bennett confessed to the crime after waiving his Miranda rights.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Web Site Allegedly Stole Job Seekers’ Data in Tax-Fraud Scheme

April 18, 2012

The New York Times on April 17, 2012 released the following:

“By RUSS BUETTNER

A Web site that promised to connect people with much-needed jobs during the recession was actually a means to steal the applicants’ personal information in a scheme to file fraudulent tax returns, prosecutors said on Tuesday.

The site, http://www.jobcentral2.net, listed nonexistent jobs and used applicants’ identities to file the bogus federal tax returns and collect tax refunds, said Cyrus R. Vance Jr., the Manhattan district attorney.

Petr Murmylyuk, 31, a Russian citizen living Brooklyn, preyed upon unemployed people because they were unlikely to have income and unlikely to file a tax return, reducing the chances that the fraudulent returns would draw attention, Mr. Vance said.

“His scheme hurt jobless individuals and society as a whole,” Mr. Vance said.

The ease with which a bogus company can look legitimate on the Internet has created a perfect scenario for fraudulently “phishing” for Social Security numbers and other personal information under various pretenses.

Filing fake tax returns, in particular, is a growing problem. In January, the Internal Revenue Service and the Justice Department announced that a law enforcement sweep through 23 states had revealed the potential theft of thousands of identities and taxpayer refunds.

The I.R.S. has devoted a Web page to listing enforcement actions involving identity thefts used to fraudulently claim tax refunds. In the most recent case, a woman from Monroeville, Ala., who had conspired with a tax return provider to file bogus returns was sentenced to 75 months in prison and ordered to pay more than $1.3 million to the federal government.

The most common form of identity theft complaint received by the Federal Trade Commission’s Consumer Sentinel Network relates to the filing of fraudulent government documents or benefits.

Mr. Murmylyuk’s site claimed that its job placement services were “sponsored by the government and intended for people with low income,” prosecutors said. He sent e-mails with links to his fake Web site through legitimate job search forums and college electronic mailing lists, they said.

He collected refunds in the names of 108 job seekers, an indictment against him said. The amount collected on each was about $3,500 to $6,500, which totaled more than $450,000. Mr. Vance’s office said that money was stolen from the federal government.

Mr. Murmylyuk recruited 11 students from Kazakhstan, who let him use their bank accounts to cash the tax refunds, according to court documents. Some of the students returned to Kazakhstan shortly after opening the accounts for Mr. Murmylyuk, and were indicted in absentia.

Mr. Murmylyuk, also known as Dmitry Tokar, was charged with money laundering, identity theft and other charges. He faces up to 15 years in prison if convicted on the top charge of grand larceny.

Federal prosecutors in New Jersey, meanwhile, charged Mr. Murmylyuk on Tuesday with working with a ring that stole $1 million by hacking into retail brokerage accounts at Scottrade, E*Trade, Fidelity, Schwab and other brokerage firms and executing sham trades.

He was charged with conspiracy to commit wire fraud, unauthorized access to computers and securities fraud. He faces a maximum of five years in prison and a $250,000 fine on the federal charges if convicted.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Federal Prosecutors Say James “Whitey” Bulger’s Alleged Victims Should Address a Federal District Court Judge in Catherine Greig’s Federal Case

April 16, 2012

Boston.com on April 13, 2012 released the following:

“Prosecutors say Bulger victims should address court in Greig’s case

By Milton J. Valencia, Globe Staff

Federal prosecutors say that the families of James “Whitey” Bulger’s alleged victims should be able to address a federal court judge and describe the pains they suffered at the hands of his girlfriend, Catherine Greig, when she is sentenced in June.

Victims of crimes are allowed to provide impact statements in court proceedings, and prosecutors say that Bulger’s alleged victims are Greig’s victims, as well.

“She knew that law enforcement was actively searching for Bulger so that he could be brought to Boston to face charges,” prosecutors said in court filings. “At a minimum, she should have known that her conduct would cause distress to those families.”

Greig, 61, pleaded guilty in March to helping Bulger remain a fugitive, and for identity theft. She helped him go to a doctor’s office and obtain prescriptions, using fake identification, for instance.

She was with him for most of his 16 years on the lam, and they were arrested together on June 22 last year in Santa Monica, Calif., in the same apartment they had been living in since at least 1998.

Greig is slated to be sentenced June 12, and faces up to five years in prison and a $250,000 fine on each of three counts: conspiracy to harbor a fugitive, conspiracy to commit identity theft, and identity theft.

Bulger is slated to go to trial in November.

US District Court Judge Douglas P. Woodlock had asked prosecutors whether Bulger’s victims would be eligible to address the court in Greig’s case, and prosecutors respond that they are, that they suffered “emotional distress.”

“The defendant helped Bulger avoid capture,” prosecutors said. “By doing so, she took an active part in denying the families of the alleged murder victims an opportunity to have Bulger brought to court to face justice. The emotional harm to those families was real and significant.

“For sixteen years, those families faced the prospect that Bulger would never be found and that the alleged murderer of their loved ones would escape justice.””

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Federal Indictment

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Alleged AWOL Pa. soldier obtained Microsoft co-founder debit card by changing account address

March 27, 2012

Newser.com on March 27, 2012 released the following:

“FBI: Pa. man stole Microsoft co-founder’s identity

By RANDY PENNELL | ASSOCIATED PRESS

An AWOL soldier’s simple scheme to defraud one of the richest men in the world has landed him in federal custody, according to a criminal complaint.

In the complaint unsealed Monday, federal investigators allege Brandon Lee Price changed the address on a bank account held by billionaire Microsoft co-founder Paul Allen, then had a debit card sent to his Pittsburgh home so he could use it for payments on a delinquent Armed Forces Bank account and personal expenses.

Price called Citibank in January and changed the address on an account held by Allen from Seattle to Pittsburgh, then called back three days later to say he had lost his debit card and asked for a new one to be sent to him, an FBI investigator wrote in a criminal complaint filed in February.

The card was used to attempt a $15,000 Western Union transaction and make a $658.81 payment on the Armed Forces Bank loan account the day it was activated, according to the complaint. Surveillance footage also captured him attempting purchases at a video game store and a dollar store, authorities alleged.

Investigators found Price was listed as Absent Without Leave from the Army and wanted as a deserter, authorities said in the complaint. He was arrested March 2 and ordered detained until April 2 unless the Army takes him into custody.

David Postman, a spokesman for Allen, said the fraud was detected by the bank, who alerted law enforcement officials. The only transaction _ out of four listed in the complaint totaling $15,936.99 _ that apparently made it through was the loan payment, Postman said.

While the financial loss is comparatively small, it shows the importance of the issue of identity theft prevention.

“Clearly, it’s a reminder that anyone can be a victim of this,” Postman said.

The complaint doesn’t specify how Price allegedly changed the address on the account.

A Citibank spokeswoman said the company does not comment on details of security breaches or customer accounts. In a written statement, spokeswoman Catherine Pulley said the company “identified the actions of a fraudulent account takeover and turned the matter over to law enforcement” and “will continue to work with law enforcement in the ongoing investigation.”

An email to Price’s public defender wasn’t immediately returned, nor was a voicemail left at a phone number for Price listed in the complaint.

Allen made the bulk of his fortune founding Microsoft with Bill Gates in 1975. He left the company in 1983 and now owns the Seattle Seahawks and the Portland Trail Blazers. He is the founder and chairman of Vulcan Inc., the company that manages his business and charitable undertakings. Forbes estimates Allen’s net worth at $14.2 billion.

Accounts with other credit card companies may have also been targeted, but none of Allen’s other accounts were compromised, Postman said.

“It certainly is a surprise and reason for everyone to make sure that all that stuff is properly cared for and monitored,” Postman said.

Just under 280,000 cases of identity theft were reported in 2011, according to the Federal Trade Commission’s Bureau of Consumer Protection. That includes complaints through the Better Business Bureau and state attorney general offices and other law enforcement agencies.

WPXI-TV first reported Price’s arrest.”

US v Brandon Lee Price – Federal Criminal Complaint

US v Brandon Lee Price – Affidavit in Support of Criminal Complaint

18 U.S.C. § 1343 – Wire Fraud

18 U.S.C. § 1344 – Bank Fraud

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

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To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


IRS policies help fuel tax refund fraud, officials say

March 20, 2012

CNN on March 20, 2012 released the following:

“By Scott Zamost and Randi Kaye, CNN Special Investigations Unit

North Miami Beach, Florida (CNN) — Criminals across the country are raking in billions of dollars in tax refunds through a new and brazen form of fraud that takes advantage of the IRS’s fast online returns, law enforcement officials say.

Using laptops and free Wi-Fi connections, criminals are stealing identities and using the names of legitimate taxpayers to file fraudulent online tax returns. They’ve raked in billions, buying luxury cars, expensive jewelry and plastic surgery, police said.

“It’s like the federal government is putting crack cocaine in candy machines,” said Detective Craig Catlin of the North Miami Beach, Florida, Police Department. “It’s that easy.”

First, thieves obtain Social Security numbers and other personal information from insiders at hospitals, doctor’s offices, car dealerships or anywhere the information is stored. Then, they file an online tax return using the real taxpayer’s name and a fictitious income. In most cases, the criminals buy a debit card so the IRS can issue the refund on that card, although some thieves have also gotten their returns on actual Treasury checks.

The thieves know that the IRS does not verify the employer W-2s sent with the return until after the refund is issued.

It is a particular problem in the state of Florida, according to law enforcement officials.

“We can’t go … two days in a row without making a traffic stop, and there’s going to be tax return fraud in the car,” Catlin said. “We could stop an 18-year-old kid who’s got five (debit) cards. The average is $5,000 per card. So they’ll have $25,000, which is really cash, even though it’s on debit cards.”

And it’s not just small-time criminals, he said.

“We have other cases that range up to $100 million where subjects have opened up corporations and bank accounts and business accounts,” Catlin said. “And they’re receiving millions of dollars from the IRS that are all fraudulent.”

Prisoners’ tax refund scam nets millions from IRS

Last year, North Miami Beach police arrested the leader of the “Money Avenue” gang that they say specializes in tax return fraud. When police searched his home, they found about $250,000 in debit cards “just sitting on the dining room table for that week’s worth of work,” Catlin said.

“And inside his closet, there were nine to 10 spiral notebooks, ledgers of names, Social Security numbers, and dates of birth and the dollar amounts of returns that they’ve done on 3,000 victims,” he added.

It’s a crime that has replaced drug dealing in many neighborhoods.

“They’re sitting on a computer or iPad; they’re doing a return with a stolen identity where they don’t have to rob anybody or stick a gun in anybody’s face or run through the streets from police,” Catlin said.

Although tax refund fraud has been around for decades, North Miami’s interim police Chief Larry Gomer said the speedy returns and the option of having your refund issued on a debit card are making it easier for criminals to pull off the fraud.

“I think (the IRS’s) intentions might have been good in trying to speed returns to members of the community, but I think the problem is, they have set up a system that is too easy to abuse,” Gomer said.

He suggested that the IRS slow its processing of tax returns.

“Right now, when someone becomes a victim of income tax fraud and they catch it, it could take up to a year for them to get their return,” Gomer said. “But the way that the IRS is running the system right now, somebody can make a fraudulent return, (and) they are mailing out a check to them in two weeks without checking the information on the return.”

In Florida, where identity theft is rampant, the cities of North Miami Beach and Tampa have been particularly hard hit by the fraud. Police estimate that in the past two years, criminals in Tampa have cashed in on $450 million in fraudulent tax return money.

Even police who are fully aware of the scam have become targets themselves, including four North Miami Beach Police Department detectives who specialize in combating tax refund fraud and officers in other South Florida police departments.

Police in Tampa discovered “a written tutorial that tells you step by step how to commit this type of crime,” according to the city’s police chief, Jane Castor.

“Throughout those written pages, it says how simple it is to do it,” she said. “We’ve also heard from people on the street that it’s about a five-minute street-corner lesson.”

In fact, a police informant who teaches friends how to commit the fraud said anyone could learn it.

“It’s like friends get together, and everybody brings their laptops, and we all work together,” the informant said. “Some people I know get up at like 8 in the morning and don’t finish until 8 at night.”

Law enforcement officials said that if the IRS stopped allowing the use of debit cards, that would curtail a majority of the fraud.

“The debit cards are a huge problem,” Castor said. “Plus … the (IRS’s) focus, from my understanding, is getting these tax returns out quickly … so instead of focusing on getting those out quickly, (the IRS should) put more of a focus on the fraudulent aspect of it.”

Deputy IRS Commissioner Beth Tucker pointed out that the debit cards are widely used by legitimate taxpayers who may not have a bank account.

“One hundred and forty million folks are filing their returns every year. Not every taxpayer has a bank account, and so the debit cards that are issued by a third-party provider are a legitimate way for taxpayers to get their refund,” she said.

Last year, the IRS reported 938,664 fraudulent returns related to identity theft, totaling $6.5 billion, Treasury Inspector General for Tax Administration J. Russell George told a House subcommittee this month.

Treasury officials say that was money identified by the IRS as fraudulent but not actually issued. The IRS could not provide an estimate of how much fraudulent refund money it has issued.

“Any dollar that goes out of our tax system related to refund fraud is a dollar too much,” Tucker said. “We have noticed that there are more folks attempting identity theft. We’re in the middle of filing season, and we should be able to have a better assessment of exactly what the dollar amount could potentially be.”

Last year, the IRS identified at least 582,000 taxpayers who were the victims of identity theft, which is more than double the amount from only three years prior.

In testimony before Congress last year, National Taxpayer Advocate Nina Olson said the IRS has implemented a number of filters to catch the fraud, including an electronic marker to mark accounts of verified identity theft victims, an IRS identity theft affidavit form and a standardized list of acceptable documents to substantiate identity theft.

Tucker said the IRS filters are “in place from the start of the filing season” and are “part of our prevention and detection.” She also said the IRS has trained 40,000 employees across the country in the past three months to deal with identity theft.

Also, the IRS last year began issuing an Identity Protection Personal Identification Number to victims of identity theft when filing their future returns.

But the filters, according to Olson’s annual report to Congress, “inevitably block large numbers of proper refund claims” since there “is no easy way to distinguish proper claims from improper ones.”

Tax refund fraud by identity theft will be the subject of Tuesday’s hearing before the Senate Subcommittee on Fiscal Responsibility and Economic Growth. It is the third hearing on the issue since last year.

Tampa officials have expressed concern that the IRS is not doing enough to combat the situation, which Castor said is one of the worst cases of fraud she has seen in her career.

“In my 28 years of law enforcement, I don’t think that I have ever seen this magnitude of fraud that is just wide open,” the police chief said. “It’s wide open and there just doesn’t seem to be much being done about it.”

Tampa Mayor Bob Buckhorn said he’s angry that the IRS has not done more to help the city combat the fraud.

“As far as I’m concerned, they’re missing in action,” Buckhorn said. “They have not been helpful; they have not been a player; they have not taken responsibility for their side of the enforcement. If anything, you know, we’ve been banging our heads against their door asking for help and getting nothing in response. The silence has been deafening.”

Tucker disagreed with the mayor, noting that the IRS has “significantly increased the amount of resources we’ve devoted to identity theft, a heinous crime.”

A week after CNN’s March 6 interview with Tucker, the IRS sent a team of officials to meet with police officials in North Miami Beach and Tampa.

Buckhorn said the problem in Tampa is “just the tip of the iceberg” and offered this warning to the mayors of other U.S. cities:

“Go back and ask the IRS in (your) jurisdiction, ‘What are you doing? Is this a problem in my jurisdiction?’ Because I guarantee you it is,” Buckhorn said. “You may not know it, but it is.””

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

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To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


2011 National Gang Threat Assessment Issued

October 21, 2011

The Federal Bureau of Investigation (FBI) on October 21, 2011 released the following:

“According to the 2011 National Gang Threat Assessment released by the National Gang Intelligence Center (NGIC), approximately 1.4 million gang members belonging to more than 33,000 gangs were criminally active in the U.S. as of April, 2011. The assessment was developed through analysis of available federal, state, local, and tribal law enforcement and corrections agency information; 2010 NDIC National Drug Threat Survey (NDTS) data; and verified open source information.

“Gangs continue to expand, evolve, and become more violent. The FBI, along with its federal, state, local, and tribal law enforcement partners, strives to disrupt and prevent their criminal activities and seek justice for innocent victims of their crimes,” said Assistant Director Kevin Perkins, FBI Criminal Investigative Division.

Other key findings are as follows:

  • Gangs are responsible for an average of 48 percent of violent crime in most jurisdictions and up to 90 percent in several others, according to NGIC analysis.
  • Gangs are increasingly engaging in non-traditional gang-related crime such as alien smuggling, human trafficking, and prostitution. Gangs are also engaging in white-collar crime such as counterfeiting, identity theft, and mortgage fraud.
  • Gangs are becoming increasingly adaptable and sophisticated, employing new and advanced technology to facilitate criminal activity discreetly, enhance their criminal operations, and connect with other gang members, criminal organizations, and potential recruits nationwide and even worldwide.

The following agencies contributed to the assessment: U.S. Department of Defense; Naval Criminal Investigative Service; U.S. Army, Fort Dix Criminal Investigative Division; Directorate Emergency Services USAG-HI; U.S. Department of Homeland Security; U.S. Citizenship and Immigration Services; U.S. Customs and Border Protection; U.S. Border Patrol; U.S. Homeland Security Investigations; U.S. Department of the Interior; Bureau of Land Management; U.S. Department of Justice; Bureau of Alcohol, Tobacco, Firearms, and Explosives; Drug Enforcement Administration; Federal Bureau of Investigation; Federal Bureau of Prisons; Immigration and Customs Enforcement; National Drug Intelligence Center; National Gang Center; National Gang Intelligence Center; U.S. Marshals Service; U.S. Probation and Parole; U.S. Department of State; and numerous state, local, regional, and tribal law enforcement agencies.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

Federal Crimes – Appeal

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To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.