It`s tax time. Which also means it may also be scam time.
“They took the identities basically names, social security numbers of real people and without those people’s knowledge, they filed fraudulent tax refunds,” says Nathaniel Sims, U.S. Postal Inspector.
In every case, the suspects claimed to be a student and applied for a $1,000 tax credit.
“It was irrespective of whether the person was 85 years old and hadn`t been in school since they were high school or whether the person was 22 years old and was in college,” says Sims.
Then, suspects began cold calling victims telling them they were entitled to a $500 refund. All they had to do was supply their personal information and they did.
“They filed a fraudulent tax return, claimed a $1,000 student credit and asked the IRS to do a split refund. They would have the IRS issue a $500 check to the victim and then they would have the IRS send $500 to them,” says Sims.
This is why the scheme worked and grew so quickly. Victims actually received a $500 check.
This scheme spread like wild fire. Not only do you have a sort-of plausible explanation that there is this stimulus money that`s available, all you have to do is submit for it, but they are actually paying out for it.
Postal inspectors are still investigating the case, but they do know $15,000 false returns were filed and there was more than 19 million in losses.
Victims didn`t realize they were scammed until they filed their tax return.
“I`ve had victims tell me they were evicted from their homes because they didn`t get the tax return they were expecting,” says Sims.
Three suspects were arrested for starting the scheme, and inspectors were shocked to discover all the money was gone.
“Most of the money actually went into lifestyle. It`s not their money so they didn`t need to be frugal with it, so most of it’s gone,” says Sims.
The most important takeaway from this story—always protect your personal information.
“If the government is giving out a stimulus, they know your name and social security number. You will be contacted,” says Sims.
The three suspects involved in this case are all serving between 3 and 20 years in federal prison.