Federal officials announced arrests and charges last month against four people accused of participating in the scheme, including Nakeisha Hall, 39, an IRS employee who worked in the Taxpayer Advocate Service office in Birmingham, Ala., from July 2007 to November 2011. She has since worked in Taxpayer Advocate Service offices in Omaha, Neb., New Orleans, La., and Salt Lake City, Utah. Federal agents arrested her on December 22 in Holly Springs, Miss.
Federal agents also arrested another participant in the scheme, Jimmie Goodman, 37, of Birmingham. A third participant, Abdulla Coleman, 37, formerly of Birmingham, was already in state custody in Wisconsin on unrelated charges. All three were indicted by a grand jury earlier in December.
In conjunction with the arrests of Hall and Goodman, federal officials also unsealed charges relating to another participant in the scheme, Lashon Roberson. Prosecutors filed a five-count information in October charging Roberson, 36, of Pelham, Ala., with conspiracy to commit mail fraud affecting a financial institution and four counts of mail fraud affecting a financial institution.
According to the indictment, Hall obtained individuals’ names, birth dates and Social Security numbers through unauthorized access to IRS computers. She then used the information to prepare fraudulent income tax returns and submitted them electronically to the IRS. Hall asked the IRS to pay the refunds to debit cards and directed that the cards be mailed to addresses that she controlled, according to prosecutors. Hall solicited and received the drop addresses from Goodman, Coleman and the other co-conspirators, who also collected the refund cards from the mail.
Hall then activated the cards by using stolen identity information, according to the indictment. She, Goodman, Coleman and others involved in the scheme took the money off the debit cards at ATMs or used the cards for purchases. If the fraudulent returns generated U.S. Treasury checks rather than the requested debit cards, Hall and the others used fraudulent endorsements in order to cash the checks. Hall allegedly compensated Goodman, Coleman and other co-conspirators by giving them a portion of the refund money, or by giving them refund cards for their own use.
According to the indictment, Hall, Goodman, Coleman and others conspired to defraud both the IRS and financial institutions, including Bancorp Bank, between January 2008 and November 2011, and used the U.S. mail to execute the fraud. Hall, Goodman, Coleman and others also conspired to obtain money from Bancorp Bank and other financial institutions. Bancorp Bank and other financial institutions issue stand-alone debit cards for the purpose of accepting tax refunds.
“Taxpayers trust, and expect, that IRS employees, as a whole, will safeguard their most sensitive personal information,” said Joyce White Vance, U.S. Attorney for the Northern District of Alabama, in a statement. “Taxpayers also must trust that IRS employees in the Taxpayer Advocate Service will not only protect their sensitive information but will actively assist them when it has been compromised by others. An IRS taxpayer advocate who exploits that trust, and with full knowledge of the significant impacts of identity theft, uses her IRS access to compromise taxpayers’ identities and steal a million dollars from the U.S. Treasury is committing a particularly egregious crime that will not go unpunished. I thank the TIGTA and IRS-CI investigators who worked diligently with my office to bring this case forward.”
The December indictment charges Hall, Goodman and Coleman with conspiring with others known and unknown to the grand jury to commit bank fraud and mail fraud affecting a financial institution. The indictment also charges Hall with one count each of theft of government funds, aggravated identity theft and unauthorized access to a protected computer.
The theft, aggravated identity and unauthorized access counts relate to two specific taxpayers’ information that Hall accessed and used in 2010.
The conspiracy charge carries up to 30 years in prison and a $1 million fine. The maximum prison penalty for theft of government funds is 10 years in prison. Aggravated identity theft carries a mandatory two-year prison term, and unauthorized access to a protected computer carries a maximum five-year prison term. All three charges carry a maximum $250,000 penalty.
Source: Accounting Today