JAY WEAVER
miamiherald.com
Identity-theft crimes have soared in the electronic age, with crooks graduating from everyday credit-card fraud to stealing people’s identities such as Social Security numbers for income tax-return scams.
Almost one year ago, in broad daylight, North Miami postal carrier Bruce Parton was killed for his key — a master key, authorities say, that unlocked personal financial information to residents of a North Miami-Dade condo building.
The two men charged with the 60-year-old’s murder used his so-called Arrow Key to steal the information from dozens of residents’ mailboxes. Like magic, the pair converted the identities of others into an electronic stream of cash, by filing fabricated income tax returns in the victims’ names over the Internet, according to court documents.Their unwitting accomplice turned out to be the Internal Revenue Service. The IRS, without verifying their false income claims, loaded the refunds onto debit cards the men allegedly used in others’ names at Winn-Dixie supermarkets, 7-Eleven convenience stores and Chase Bank, records show.
Pikerson J. Mentor, 30, the alleged triggerman who had just been released from prison before Parton’s death, and Saubnet Dwayne Politasse, 23, the accused getaway driver, have joined a disturbing trend of street criminals who have entered the growing ranks of identity-theft scammers, authorities say.
Both Miami-Dade men, who are being held in federal custody without bond, pleaded not guilty this month to new aggravated ID theft charges — along with homicide, use of a firearm, carjacking, robbery, debit-card fraud, unlawful possession of a postal key and, in Mentor’s case, possessing ammunition as a felon.
The U.S. Attorney’s Office and federal agencies won’t comment about the Dec. 6 murder of Parton. The Justice Department is considering whether to seek the death penalty.
But authorities say the case is a dramatic example of identity-theft crimes that have soared in the electronic age. Crooks have graduated from everyday credit-card fraud to stealing people’s identities such as Social Security numbers in order to rob refunds from taxpayers before they file their returns with the IRS.U.S. Attorney Wifredo Ferrer said he expanded a federal task force from Miami-Dade to Broward early this year to fight identity-theft crimes in the region, where prosecutions of defendants have quadrupled to nearly 90 since 2007, court records show.
“We are seeing defendants once involved in other types of crimes [such as drug trafficking] getting involved in identity-theft schemes, because it’s easy to do, lucrative and less violent,” Ferrer told The Miami Herald.
Ferrer said the tax-return rackets are particularly pernicious because they harm two victims: legitimate taxpayers whose identities and refunds are stolen — plus the federal government.
“I’m seeing this as a real threat because we’re dealing with a massive program,” he said.
Indeed, the epidemic of identity-theft and tax-return fraud has spread not only in South Florida but nationwide.
In September, for example, federal agents arrested 49 people — several with criminal records — in the Tampa area on charges of stealing identities and using them to obtain fraudulent tax returns. Investigators in Operation Rainmaker, as the year-long probe was dubbed, intercepted $100 million and recovered $5 million in fraudulent refunds, cash, jewelry, cars and entertainment systems.
Here’s how the scheme worked: After making sure a person’s stolen Social Security number was not used on a tax return, a suspect filed for a refund through online companies such as Turbo Tax. A tax refund was then issued with a prepaid debit card, check or direct deposit.
The two men charged with the 60-year-old’s murder used his so-called Arrow Key to steal the information from dozens of residents’ mailboxes. Like magic, the pair converted the identities of others into an electronic stream of cash, by filing fabricated income tax returns in the victims’ names over the Internet, according to court documents.Their unwitting accomplice turned out to be the Internal Revenue Service. The IRS, without verifying their false income claims, loaded the refunds onto debit cards the men allegedly used in others’ names at Winn-Dixie supermarkets, 7-Eleven convenience stores and Chase Bank, records show.
Pikerson J. Mentor, 30, the alleged triggerman who had just been released from prison before Parton’s death, and Saubnet Dwayne Politasse, 23, the accused getaway driver, have joined a disturbing trend of street criminals who have entered the growing ranks of identity-theft scammers, authorities say.
Both Miami-Dade men, who are being held in federal custody without bond, pleaded not guilty this month to new aggravated ID theft charges — along with homicide, use of a firearm, carjacking, robbery, debit-card fraud, unlawful possession of a postal key and, in Mentor’s case, possessing ammunition as a felon.
The U.S. Attorney’s Office and federal agencies won’t comment about the Dec. 6 murder of Parton. The Justice Department is considering whether to seek the death penalty.
But authorities say the case is a dramatic example of identity-theft crimes that have soared in the electronic age. Crooks have graduated from everyday credit-card fraud to stealing people’s identities such as Social Security numbers in order to rob refunds from taxpayers before they file their returns with the IRS.U.S. Attorney Wifredo Ferrer said he expanded a federal task force from Miami-Dade to Broward early this year to fight identity-theft crimes in the region, where prosecutions of defendants have quadrupled to nearly 90 since 2007, court records show.
“We are seeing defendants once involved in other types of crimes [such as drug trafficking] getting involved in identity-theft schemes, because it’s easy to do, lucrative and less violent,” Ferrer told The Miami Herald.
Ferrer said the tax-return rackets are particularly pernicious because they harm two victims: legitimate taxpayers whose identities and refunds are stolen — plus the federal government.
“I’m seeing this as a real threat because we’re dealing with a massive program,” he said.
Indeed, the epidemic of identity-theft and tax-return fraud has spread not only in South Florida but nationwide.
In September, for example, federal agents arrested 49 people — several with criminal records — in the Tampa area on charges of stealing identities and using them to obtain fraudulent tax returns. Investigators in Operation Rainmaker, as the year-long probe was dubbed, intercepted $100 million and recovered $5 million in fraudulent refunds, cash, jewelry, cars and entertainment systems.
Here’s how the scheme worked: After making sure a person’s stolen Social Security number was not used on a tax return, a suspect filed for a refund through online companies such as Turbo Tax. A tax refund was then issued with a prepaid debit card, check or direct deposit.
They “basically corrupted the online tax filing system,” a U.S. Secret Service agent said after the arrests.
Scammers have, in fact, exploited a hole in the IRS electronic filing system, according to the General Accountability Office.
The federal watchdog agency found that the IRS does not actually match tax returns to the W-2 income forms that employers file until months after the filing seasons ends on April 15. Employers file them at the end of February or early March, but the agency does not match them up with incomes reported on 1040 forms until June — way too late to catch identity thieves.
“The refunds go out the door first, and then the matching is done afterward,” Jim White, GAO’s director of strategic issues, said in a report prepared for a congressional hearing last summer. He said the IRS needs to modernize its processing system and require employers to file workers’ income statements earlier in the year.
White said “the IRS could do matching before refunds go out and catch more fraud,” but he warned “this is something that’s years away.”
In the meantime, everyday criminals are moving into the identity-theft rackets, using computers, the Internet and online tax services to fleece the IRS -- and taxpayers.
The GAO reports that the number of identity theft-related fraud incidents on tax returns reached 248,000 last year, about five times more than in 2008.
It has become such a viral crime that the chief of the IRS issued a personal and public apology at the congressional hearing in June, when victims testified about the shabby treatment they received after being ripped off. They had to wait many months to get their IRS refunds.
IRS Commissioner Douglas Shulman stressed that the agency is not the cause of identity theft, laying the blame on thieves who steal personal information and use it to file fraudulent refunds. He said the agency, which has promoted electronic filings for fast returns, is trying to improve its ability to spot fake claims before refunds are sent out.
In a statement issued Friday, the IRS expressed its “deepest sympathy to all victims of identity theft,” while acknowledging its impact on the rising number of fraudulent tax returns. But the agency said that for the upcoming tax season, it is “focused on preventing, detecting and resolving identity theft cases as soon as possible.”
Agents with the FBI, Secret Service and Postal Inspection Service say identity-theft crimes have been around for years, but the schemes have become more sophisticated to outsmart financial and other institutions. Criminals can steal personal information from mail boxes, the Internet or employers, then use or sell the data to others.
Some even do it while they’re in jail. Last year, an inmate held at the Monroe County jail near Key West was charged, along with three family members, with filing bogus tax returns seeking nearly $70,000 in refunds. The ringleader recruited fellow inmates, former inmates and relatives to file 2004-06 tax returns with fabricated employment, income and withholdings in a plot to trick the IRS.
Last week, an employee for the Jewish Community Services of South Florida was arrested for selling the personal information of 32 Holocaust survivors for $1,000 to a confidential police informant. The information was to be used to defraud the IRS.
“What’s gotten more advanced is how they get the personal information — all the information that is necessary to get past the safeguards,” said Bladismir Rojo, a South Florida postal inspector.
“In the shady underworld, there are different people who can get you different personal identifier information,” he said.
James Porter, a special agent with the Secret Service in Miami, said criminals have become more clever at exploiting people’s financial security because of the conveniences inherent in electronic banking and filing income tax returns.
Porter said “personal information is a commodity” that can be converted to cash for criminals.
“Any criminal is going to be looking for the biggest score with the least risk — they know what the punishment is for drug trafficking,” Porter said. “This is the next thing they have come up with.”
Read more: http://www.miamiherald.com/2011/11/26/2520056_p2/scammers-steal-irs-refunds-with.html#ixzz1evL3DdCE
Scammers have, in fact, exploited a hole in the IRS electronic filing system, according to the General Accountability Office.
The federal watchdog agency found that the IRS does not actually match tax returns to the W-2 income forms that employers file until months after the filing seasons ends on April 15. Employers file them at the end of February or early March, but the agency does not match them up with incomes reported on 1040 forms until June — way too late to catch identity thieves.
“The refunds go out the door first, and then the matching is done afterward,” Jim White, GAO’s director of strategic issues, said in a report prepared for a congressional hearing last summer. He said the IRS needs to modernize its processing system and require employers to file workers’ income statements earlier in the year.
White said “the IRS could do matching before refunds go out and catch more fraud,” but he warned “this is something that’s years away.”
In the meantime, everyday criminals are moving into the identity-theft rackets, using computers, the Internet and online tax services to fleece the IRS -- and taxpayers.
The GAO reports that the number of identity theft-related fraud incidents on tax returns reached 248,000 last year, about five times more than in 2008.
It has become such a viral crime that the chief of the IRS issued a personal and public apology at the congressional hearing in June, when victims testified about the shabby treatment they received after being ripped off. They had to wait many months to get their IRS refunds.
IRS Commissioner Douglas Shulman stressed that the agency is not the cause of identity theft, laying the blame on thieves who steal personal information and use it to file fraudulent refunds. He said the agency, which has promoted electronic filings for fast returns, is trying to improve its ability to spot fake claims before refunds are sent out.
In a statement issued Friday, the IRS expressed its “deepest sympathy to all victims of identity theft,” while acknowledging its impact on the rising number of fraudulent tax returns. But the agency said that for the upcoming tax season, it is “focused on preventing, detecting and resolving identity theft cases as soon as possible.”
Agents with the FBI, Secret Service and Postal Inspection Service say identity-theft crimes have been around for years, but the schemes have become more sophisticated to outsmart financial and other institutions. Criminals can steal personal information from mail boxes, the Internet or employers, then use or sell the data to others.
Some even do it while they’re in jail. Last year, an inmate held at the Monroe County jail near Key West was charged, along with three family members, with filing bogus tax returns seeking nearly $70,000 in refunds. The ringleader recruited fellow inmates, former inmates and relatives to file 2004-06 tax returns with fabricated employment, income and withholdings in a plot to trick the IRS.
Last week, an employee for the Jewish Community Services of South Florida was arrested for selling the personal information of 32 Holocaust survivors for $1,000 to a confidential police informant. The information was to be used to defraud the IRS.
“What’s gotten more advanced is how they get the personal information — all the information that is necessary to get past the safeguards,” said Bladismir Rojo, a South Florida postal inspector.
“In the shady underworld, there are different people who can get you different personal identifier information,” he said.
James Porter, a special agent with the Secret Service in Miami, said criminals have become more clever at exploiting people’s financial security because of the conveniences inherent in electronic banking and filing income tax returns.
Porter said “personal information is a commodity” that can be converted to cash for criminals.
“Any criminal is going to be looking for the biggest score with the least risk — they know what the punishment is for drug trafficking,” Porter said. “This is the next thing they have come up with.”
Read more: http://www.miamiherald.com/2011/11/26/2520056_p2/scammers-steal-irs-refunds-with.html#ixzz1evL3DdCE