- Biggest Tax Fraud In US History
In an email to the Associated Press, First Assistant U.S. Attorney for Oregon, Scott Erik Asphaug, said this is one of the largest tax fraud cases in the United States in which stolen personal identification information was used to defraud the IRS. Its scope is staggering.
According to the US Attorney’s office for Oregon, a Nigerian man, Michael Oluwasegun Kazeem, 24, has been sentenced to seven years in federal prison for his role in the bilking of over $11 million via an identity-theft scheme from the Internal Revenue Service (IRS).
Kazeem, who came to the United States on a student visa, has been sentenced in federal court in the southern Oregon town of Medford on Nov. 8 for conspiracy to commit mail fraud, aggravated identity theft and mail fraud.
Kazeem has also been ordered by U.S. District Court Judge Ann Aiken to pay $4.3 million in restitution.
Last August, Kazeem’s brother, Emmanuel Kazeem, was convicted in Medford of mail and wire fraud, aggravated identity theft and conspiracy to commit mail and wire fraud. The evidence was presented at his trial and showed Emmanuel Kazeem purchasing over 91,000 taxpayer identities from a Vietnamese hacker.
Kazeem joined in 2013 to help his brother, who lived in Bowie, Maryland, and Nigeria. His brother’s sentencing is scheduled for March 22, 2018.
In a statement from the U.S. Attorney’s office, it was determined by an IRS criminal investigation that the co-conspirators obtained personal identifying information of more than 259,000 people, and used it to acquire over 19,500 electronic filing PINs from the IRS.
The co-conspirators obtained and used pre-paid debit cards with the stolen identities to receive direct electronic tax refund deposits. They eventually filed over 10,000 fraudulent federal tax returns, attempting to obtain over $91 million in refunds, with actual losses amounting to over $11 million.
Refunds were withdrawn from the debit cards and at least 2,000 wire transfers totaling over $2.1 million were sent to Nigeria.
In an email to the Associated Press, First Assistant U.S. Attorney for Oregon Scott Erik Asphaug said this is one of the largest tax fraud cases in the United States in which stolen personal identification information was used to defraud the IRS. Its scope is staggering.
Authorities were alerted to the case when a Medford victim told the IRS in May 2013 that false federal and Oregon state tax returns were filed electronically using her and her husband’s names.
The returns included personally identifiable information, including their social security numbers and dates of birth. The federal refund was deposited into an account via a prepaid debit card in a suburb of Chicago while the state refund was directed to a bank account in Texas.
Back in 2014, the co-conspirators also were able to gain access to the IRS “Get Transcript” system and obtained sensitive taxpayer information to file additional fraudulent returns. Because of these and other security breaches, the IRS discontinued the “Get Transcript” program nationwide in 2015, the U.S. Attorney’s office said in a statement.
A newspaper in Medford, The Mail Tribune, reported that tax returns were filed using 13,203 accounts stolen from CICS Employment Services, a company based in Lincoln City, Oregon that performs pre-employment background checks.
The owner of CICS said he lost $420,000 worth of business, and handled hundreds of calls from distressed victims, many with limited means, the newspaper reported.
No taxpayers suffered monetarily as a result of the crimes, but were caused a plethora of issues.
“I’m deeply and emotionally sorry for the trouble I caused. What I did was wrong,” Kazeem said in court.
He is to be deported back to Nigeria after completing his sentence.