Schemer in “massive” identity theft fraud gets 4 years in slammer

DoJ says scheme involved 12,000 fraudulent federal income tax returns that sought refunds of at least $42 million from the U.S. Treasury

1Percentages are based on the total number of victims reporting their age in CSN identity theft complaints for each calendar year: CY-2013 = 254,934; CY-2014 = 278,476; and CY-2015 = 410,128. Of the consumers who contacted the FTC, 84% reported their age in CY-2015, 84% in CY-2014 and 88% in CY-2013. Credit: Consumer Sentinel Network

Identity theft is a raging problem but at least some scammers are getting their comeuppance.

The Department of Justice today touted that one scammer got four years in prison for his part in a $4.4 million fraudulent federal income tax return scheme that, according to court documents involved the filing of at least 12,000 fraudulent federal income tax returns that sought refunds of at least $42 million from the U.S. Treasury. 

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The DoJ said the false tax returns sought refunds for tax years 2005 through 2013 and were often filed in the names of people whose identities had been stolen, including the elderly, people in assisted living facilities, drug addicts and incarcerated individuals.  Refunds also were sent to people who were willing participants in the scheme.  The refunds listed more than 400 “taxpayer” addresses located in the District of Columbia, Maryland and Virginia.

The DoJ said Marc A. Bell, a former employee of the District of Columbia’s Department of Youth Rehabilitation Services, admitted taking part in a massive and sophisticated identity theft and false tax return scheme that involved an extensive network of more than 130 people, many of whom were receiving public assistance. 

The DoJ said that from 2005 to 2013, Bell was employed as a program manager, program officer or placement expeditor at the District of Columbia’s Department of Youth Rehabilitation Services.  The agency is responsible for the supervision, custody and care of young people charged with a delinquent act in the District of Columbia.

+More on Network World: IRS Scam: 5,000 victims cheated out of $26.5 million since 2013+

“In his various capacities at DYRS, Bell had access to the agency’s database system, which contained the personal identifying information of DYRS youth, including their names and social security numbers.  Bell admitted that between approximately May 2010 and April 2013, he used his computer access to obtain the personal identifying information of at least 645 then-current and former DYRS youth, the DoJ stated.

Bell admitted that he provided this information to other scheme participants, who used the names and social security numbers to file at least 1,160 fraudulent federal income tax returns that claimed refunds of approximately $4,441,194.  The IRS issued approximately 700 U.S. Treasury checks, totaling approximately $2,422,211, in the names of the DYRS youth in whose names the tax returns were filed.  Bell received financial compensation from co-conspirators for providing the stolen identities,” the DoJ stated.

Bell is but one of almost 20 participants in this scheme who have pleaded guilty to federal charges in the U.S. District Court for the District of Columbia.  Bell pleaded guilty in January to one count of conspiracy to defraud the government with respect to claims, one count of aiding and abetting in the filing of fictitious or false claims and one count aiding and abetting fraud and related activity in connection with identification documents.  In addition to the prison term, U.S. District Judge Ellen S. Huvelle ordered Bell to serve three years of supervised release and pay restitution to the IRS in the amount of $1,972,710.   

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