Florida continues to lead U.S. in identity, tax fraud

Reuters News
Posted: May 30, 2014 5:29 PM

By Zachary Fagenson

MIAMI (Reuters) - Despite efforts by federal officials to crack down on rampant identity theft linked to hundreds of millions of dollars of fraudulently claimed tax refunds, South Florida continues to lead the nation for these scams.

In the latest case, Freddie Howard, 56, of Davie, pleaded guilty on Thursday to mail fraud charges after filing fraudulent tax refunds totaling $22 million using a stolen identity as well as willing recruits. He received a total of $4.5 million in payments before being caught and faces up to 22 years in prison.

Marcelin Jean Louis, 40, of Homestead, was sentenced on Wednesday to five years in prison after pleading guilty to charges that he cashed thousands of stolen tax refund checks totaling $5 million.

As part of the plea agreement, he agreed to turn over six homes, and pay back $4.5 million.

Identity theft in Florida reached "epidemic proportions" last year, according to the Department of Justice. Officials registered more than 190 complaints per every 100,000 individuals, while in Miami that figure nearly doubled to 340 complaints per 100,000.

Since an Identity Theft Tax Fraud Strike Force was created in August 2012, South Florida prosecutors have charged 296 people for roughly $485.5 million in attempted stolen identity refund fraud, and more than $106 million in actual payments.

Among the victims have been hospital patients, Holocaust survivors at a Jewish community center, and active duty military serving overseas.

In 2010, south Florida mail carrier Bruce Parton was gunned down by members of an identity theft ring who stole his master key in order to get personal information from mail boxes.

Using stolen names and Social Security numbers, criminals are filing phony electronic tax forms to claim refunds, exploiting a slow-moving federal bureaucracy to collect the money before victims, or the IRS, discover the fraud.

“The core challenge they’re facing is one that’s prevalent throughout law enforcement, and that’s staying one step ahead of the criminal who’s unfortunately two steps ahead of law enforcement,” said David S. Weinstein, a partner in law firm Clarke Silvergate’s white-collar crime practice.

As personal data continues to flow across a myriad of online services, criminals are continually finding new ways, including hacking major online and brick-and-mortar retailers like Target and eBay, to extract individuals’ personal information.

(Editing by David Adams and Gunna Dickson)