Texas Man Sentenced 14 Years For Running $110 Million Tax Refund Scheme

Authored by Naveen Athrappully via The Epoch Times (emphasis ours),

A Texas man was sentenced to more than 14 years in prison for leading a scam seeking to steal more than $110 million in tax refunds, according to the Department of Justice (DOJ).

The sentence was handed down to Abraham Yusuff of Round Rock on Sept. 6, according to a DOJ press release. Yusuff was convicted of being the leader of a “stolen-identity-refund-fraud” scheme that ran between 2018 and 2021, the DOJ said. As part of the scheme, Yusuf and his co-conspirators contacted the IRS, posing as Certified Public Accountants and other professionals claiming to be authorized representatives of multiple taxpayers.

The defendants asked the IRS to amend taxpayer addresses on file and send tax-related information to the false addresses handled by them. Such information included wage records and account transcripts.

Data received from the IRS was used to electronically file more than 370 returns claiming fraudulent refunds. The group directed the IRS to split refunds among several prepaid debit cards that were registered in the name of the victims.

Before issuing the refunds, the IRS sent verification letters. However, these letters went to addresses controlled by the scammers, who then instructed the agency to release the refunds.

The defendants aimed to collect more than $110 million from the scheme. They succeeded in securing $30 million in fraudulent refunds from the IRS, according to Acting Deputy Assistant Attorney General Stuart Goldberg of the DOJ’s Tax Division.

On Friday, one of Yusuff’s co-conspirators was sentenced to more than two years and another for more than three years. Yusuff was also ordered to pay more than $30 million, and the other two ordered to pay more than $3.5 million combined.

“Stealing someone’s identity is abhorrent and despicable behavior. This week’s sentencing serves as a stark reminder that fraud and the pursuit of quick gains comes with severe consequences,” said special agent in charge Christopher Altemus Jr. of IRS-CI Dallas Field Office.

In total, seven individuals have so far been sentenced for being involved in the crime, with the other four sentenced to prison terms ranging from 12 to 30 months.

Identity Theft Cases

The IRS has reported a rising number of identity theft cases. In the 2024 filing season, the agency confirmed 15,242 instances of fraudulent returns filed by scammers to claim refunds of legitimate taxpayers. The IRS prevented the issuance of more than $180 million in fraudulent returns.

For the 2024 season, there has been 20 percent increase in confirmed identity theft cases registered than in 2023.

A report from the Taxpayer Advocate Service stated that the IRS’s Identity Theft Victims Assistance unit received 294,138 reports of identity theft during fiscal year 2023, the second-highest in five years.

In a bid to counter the rising number of scams threatening tax systems and taxpayers, the IRS announced a new coalition with members of the industry last month.

The coalition will “work to expand outreach and education about emerging scams, develop new approaches to identify potentially fraudulent returns at the point of filing, and create infrastructure improvements to protect taxpayers as well as federal, state, and industry tax systems,” the agency said.

The IRS regularly puts out a list of warning signs that taxpayers should watch out for to identify whether their personal data has been compromised.

Receiving letters from the IRS inquiring about a suspicious tax return not filed by the individual, inability to e-file a return due to a duplicate Social Security number, receiving a tax transcript that was not requested, and getting an IRS notice for an online account created in the taxpayer’s name are signs of potential fraud.

The U.S. Federal Trade Commission recommends victims of tax identity theft to report it with the agency at identitytheft.gov.