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Tax Refund Scam Busted in South Florida

February 6, 2013

A major, multi-million dollar tax refund scam was recently carried out by six people in southern Florida. The accused filed more than 380 fraudulent tax returns to get a whopping $160 million in false tax refunds. Florida saw massive tax identity theft before, when $100 million in stolen taxes was uncovered in Tampa.

Unlike other tax refund scams where innocent taxpayers were duped by tax frauds into filing false tax returns or sharing their tax information, this busted tax refund scam saw the willingness of many taxpayers in filing false tax returns to get huge tax refunds. The scammers charged an up-front fee of $750 from taxpayers and promised them huge money in tax refunds. After receiving the refund, the scammers would refuse to share it.

At least 180 taxpayers from 30 states were reported to be part of the tax refund scam. The accused, Michael Beiter and David Clum, were found guilty by the court and each sentenced to 25 years in prison. They were found guilty of defrauding the U.S. government by filing multiple false tax returns. Others involved in the scam received punishments ranging from three to 15 years in prison.

Tax refund scams are not new. It is a widespread crime in the U.S. where the IRS receives thousands of potentially fraudulent tax returns each year. Identity theft is carried out to file false tax returns, where tax scammers use fake emails and phony web pages to extract sensitive information from unsuspecting taxpayers. In some states, like Florida for example, the problem of identity theft for filing false tax returns has reached epic proportions.

Identity protection, especially during the tax season, can help taxpayers stay safe from tax thieves. The IRS informs taxpayers how they can protect their identity from being stolen, how to report to the IRS if their identity has been stolen, and how the IRS prevents, detects and resolves identity theft. Be careful when sharing identifying details to avoid most cases of identity theft by tax scammers this tax season.

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