Five arrested in $36.5 million IRS impersonation scam

In what is being referred to as an ongoing investigation, five people were arrested as part of a large-scale IRS impersonation scam that has stolen $36.5 million from 6,400 victims.

As part of a wide-spread scheme that began as early as October 2013, nearly 6,400 Americans have been scammed out of a a total of more than $36.5 million by individuals impersonating Internal Revenue Service (IRS) officials.

Over the course of over 2.5 years, more than 1.2 million calls fraudulent calls have been placed to United States tax payers demanding immediate cash wire transfers in order to resolve impending tax debts that could allegedly lead to immediate arrest.

However, J. Russell George – the Treasury Inspector General for Tax Administration (TIGTA) – announced Tuesday that five individuals had been apprehended in what is being described as an “ongoing investigation” into this extensive scam.

The five individuals are all Cuban nationals and were arrested in Miami, Fla., without incident and charged with wire fraud and conspiracy to commit wire fraud. According to documents involved in the case, the five were responsible for defrauding over 1,500 victims out of almost $2 million. 

Last July, Sahil Patel, a ringleader for the original scheme was sentenced to 14.5 years in prison and $1 million in forfeiture for his organizational role in the ring of fraud and extortion run through Indian “call centers.”

As part of the tax impersonation scheme, those involved placed phone calls alleging to be personnel employed by the IRS or the Department of Treasury. Such calls were often made utilizing Voice Over Internet Protocol (VOIP) technology, which is an easy way to disguise one’s calling location. The accounts were set up using fraudulent names in order to give the appearance of being affiliated with US law enforcement.

In the calls, victims were misled into believing officials were contacting them about money owed and intimidated into paying the money immediately via wire transfer service, such as MoneyGram and Walmart-2-Walmart. In recent months, scammers demanded their victims pay through iTunes gift cards. The average amount lost in the scam is $5,700.

This most recent round of arrests stemmed from a tip that went to a fraud hotline maintained by the Senate Aging Committee (which deals with matters related to older Americans) last year. In the tip, a caller reported that her husband, having received a call demanding a payment of $2,000, drove to a local Walmart store to wire the money. En route to the store, the victim crashed his car and was so distraught that he left the scene of the accident in order to continue on to wire the money, reported USA Today.

The fraud investigator traced the transfer to Minnesota and provided the information to TIGTA, which was able to identify two suspects by checking Walmart surveillance tapes.

“We have made progress in our investigation of this scam, resulting in the successful prosecution of some individuals associated with it over the past year. This summer, a ringleader was sentenced to more than 14 years in federal prison. However, this is still a matter of high investigative priority, and we will not rest until all individuals associated with this fraud have been brought to justice,” said George in a statement addressing the expanding nature of the IRS impersonation fraud. 

In order to protect oneself from the scam, the IRS has stated on several occasions that these are all tell-tale signs of a scam, as reported by Forbes:

• A call demanding immediate payment over the phone. The agency will not call about taxes owed without first having mailed you several bills.

• A call or email requiring you to verify your identity by asking for personal and financial information

• A demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe

• A demand that you use a specific payment method for your taxes, such as a prepaid debit card

• A request for credit or debit card numbers over the phone or email

• A threat to immediately bring in local police or other law-enforcement groups to have you arrested for not paying

Further, if you receive such a call, the IRS urges you not to participate but to immediately hang up the phone. Also if you receive an unusual request in an email, you should not visit any website or answer any personal questions.

You may also call the IRS back at 1.800.829.1040 to find out more information or contact TIGTA at 1.800.366.4484 to report scams or visit the “IRS Impersonation Scam Reporting” form on their website.