Postal worker uncovers massive nationwide tax fraud
12:00 PM, Feb 19, 2013
4:44 PM, Feb 5, 2013
Billions of dollars are stolen each year in a tax fraud that's easy to pull off. But a letter carrier saved the day, uncovering these crimes.
Richard Russo has been a letter carrier for 13 years and knows the people who live on his route. So he was suspicious when he started seeing one address getting multiple Treasury checks with different names.
"I was delivering the mail and noticed the names did not match the people who lived at the house," said Russo. "I started collecting the checks and brought them back to the office."
"This is an ID theft investigation that started off with perpetrators stealing or buying people's [Social Security] numbers," said U.S. Postal Inspector Cheryl Swyers.
The thieves then file false W-2 forms as the victim attached to those numbers.
With that information, criminals can file for a fraudulent tax refund. Because the U.S. Treasury check has to be issued to a specific address, thieves either pay an accomplice to pick up the check or pick it up themselves.
"Actually, at one time every house on one street was getting one, and they were all fraudulent names," said Russo.
Thieves get the stolen identities from black-market lists or by bribing an employee with access to a big database. They even troll underground websites.
Inspectors say Puerto Rican residents appear to be a target.
"Puerto Rican residents are not required to fill out federal tax returns if they have not worked outside Puerto Rico within the last year," said Swyers. "They are only required to fill out state returns."
Experts say the crime is easy to pull off, especially with electronic filing. The IRS doesn't crosscheck all returns against employer payroll records before a refund is issued.
"One particular day I would have 10 checks ... then maybe 20. In all I had $900,000 worth of bogus checks," said Russo.
More than $6 billion dollars were lost last year alone nationwide. Taxpayers are victims in these crimes, along with the victim whose social security and information is compromised. Inspectors warn if you receive mail with someone else's name to return it to the post office or to your mail carrier.