An Internet installer from Montgomery was sentenced today to 30 months in federal prison for an identity theft tax scheme in which he allegedly filed dozens of fraudulent tax returns amounting to nearly $100,000.
Our Birmingham white collar crimes defense lawyers know that acts such as these are being aggressively investigated and prosecuted by federal authorities, as tax fraud via identity theft has become an increasing problem in recent years. According to a report from CNBC, fraud like this amounts to approximately $5 billion in lost taxpayer funds each year.
In this case, the offender pleaded guilty to two federal felony counts: conspiracy to file false claims and aggravated identity theft.
The first charge, per 18 U.S.C. 286, is any attempt, successful or not, to defraud the U.S. government. It is punishable by up to 10 years in prison.
The second charge, aggravated identity theft, is defined generally in 18 U.S.C. 1028A as the knowing transfer, possession or use without lawful authority a means of identification of another person or false identification document. This charge can result in an additional five-year sentence.
This individual struck a plea deal which will allow him to serve just 2.5 years of a possible 15-year sentence.
According to the Department of Justice, the defendant was working with several co-conspirators in obtaining the identities of both prisoners and those who owed debt to a collection agency.
Additionally, the defendant at the time was working as an independent contractor for the cable company, and as such installed internet and cable access for customers. Because of his unique access, he was able to hijack the internet service of customers for whom he had worked. Back at his own home, he would use his own equipment and technical knowledge to shut down the user’s internet service for a short period of time. He would then take over the user’s internet and file those false returns – from prisoners and debtors – using the cable customer’s service. In this way, he intended to make it appear as if the phony returns were in fact being filed from the IP address of his customers.
In filing these returns, the defendant indicated that he wanted the refunds to be paid on pre-paid debit cards, which in theory would have been more difficult to trace.
However, those cards were later intercepted by the U.S. Postal Service when they began flooding in to a select few number of post office boxes and addresses.
A defense attorney for the man said that he was genuinely remorseful, and that it was the only crime he had committed in his adult life. This unquestionably had some bearing on the fact that he was sentenced to just 15 percent of the maximum possible sentence.
This individual’s co-conspirators have been indicted as well, though they have yet to go to trial or negotiate a plea deal.
White collar crimes, and tax fraud identity theft in particular, are gaining popularity because of the vast amounts of cash that can be obtained, combined with the lack of physical risk. In other words, it’s a lot more lucrative – and safer – than to commit a robbery.
However, the penalties for these crimes can be equally harsh, and the government is cracking down.
If you have been arrested in connection with identity theft in Alabama, contact our experienced legal team for help.