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Crime & Courts

Banks join battle against tax fraud

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Published:   |   Updated: March 18, 2013 at 12:12 PM

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TAMPA -

In the battle against tax-refund fraud, where Tampa is the front line, banks and credit unions are jumping into the trenches.

Identity thieves who use other people's personal information to steal tax refunds from the federal government rely on banks to cash checks and take direct deposits.

Sometimes, authorities say, bank employees are in cahoots with the thieves. And other times, banks and credit unions block the fraud and return the stolen funds to taxpayers.

"The banks hold the money and that's what the bad guys want," said Hillsborough County sheriff's Cpl. Bruce Crumpler. "If we can make that conversion of that piece of paper or plastic into money a hard thing to do, then we're winning the battle more than losing it."

One bank associated with preloaded debit cards that were linked to fraud in the Tampa area provided the IRS with a list of 60,000 bank accounts it identified nationwide with questionable tax refunds, according to a report from the Treasury Inspector for Tax Administration.

The unidentified bank blocked questionable refunds totaling $164 million from deposit into these accounts.

Along the same lines, the local Suncoast Schools Federal Credit Union has been proactive in identifying suspicious deposits. Sun Coast has identified at least $750,000 in potentially fraudulent deposits since November, said John Joyce, head of the Tampa Secret Service office.

But the bad guys sometimes work with friends inside financial institutions.

On Friday, authorities arrested a Polk County man accused of conspiring with a teller at another credit union, Lakeland-based Mid-Florida Federal, to deposit fraudulent tax refunds there.

Jermaine I. Lippett pleaded not guilty to a 16-count indictment charging conspiracy, stealing from the federal government and aggravated identity theft.

Assistant U.S. Attorney Robert Monk told U.S. Magistrate Mark Pizzo during Lippett's arraignment Friday that most of the victims in the case are senior citizens.

Lippett is accused of conspiring with Whitley Ann Glover, who was arrested in Polk County in December on charges including forgery.

According to an arrest affidavit in that case, Glover was paid $200 by an unidentified acquaintance to deposit checks made out to people whose identity had been stolen, including a dead person.

In March, authorities arrested a Tampa business owner, Nedal Ahmad, on charges that he trafficked in fraudulently obtained U.S. Treasury checks. Investigators said the proceeds were deposited into 184 bank accounts Ahmad set up in the names of 149 identity theft victims.

Those accounts were established with the help of an employee at Regions Bank, who was arrested by the Pasco County Sheriff's Office.

Joyce said there are "obvious, telltale signs" that banks and credit unions can look for in trying to identify fraud, such as individuals depositing multiple Treasury checks with different names into a single account and multiple checks sent by direct deposit into accounts.

These are "a few of the flags that go up which should indicate to a bank that perhaps something suspicious is taking place," Joyce said.

Crumpler said financial institutions initially didn't know what they were dealing with.

"Originally, they were just a passive part of it," he said. "They didn't recognize the problem. They received these checks and opened these accounts and had these direct deposits being put in by the Treasury and had these (debit) cards, thinking everything was OK."

But then, as law enforcement identified the problem, Crumpler said, "some of the institutions realized, 'We don't want to be part of this,' and started putting some measures in place to try to identify accounts that were being opened under suspicious circumstances."

Crumpler said fighting fraud is not always central to the mission of banks and credit unions.

"Banks are customer service," he said. "I've found a reluctance in some of the financial institutions to challenge people that come in and want to deposit money in their bank."

Linda Fales, vice president of risk management for Sun Coast, said the credit union has seen the red flags.

"Prior to two years ago, we were identifying the occasional fraud deposit," Fales said. "Over the last couple years, it's definitely become … an epidemic and it's huge here."

Fales said the credit union has worked closely with local law enforcement and the Secret Service to combat tax refund fraud.

Until recently, the IRS has not been approachable, she said.

"Prior to recent months, we really couldn't get anyone from the IRS to talk to."

But James Robnett, the new head of the Tampa office of IRS criminal investigations, has changed that, Fales said.

Robnett said financial institutions are "critical partners" with the IRS in stopping fraud.

"Any bank that has reached out to IRS, in particular the local Tampa … office, gets a complete explanation and understanding and assistance on how to properly scrutinize and return funds that are deemed to be from false claims, in this case, via ID theft," he said.

Fighting fraud, Fales said, is "time consuming but it's worth the effort for all taxpayers. The most important thing we can do is protect our members, protect their money and instill the fact that they trust us to protect their money."

At the same time, she said, "We're protecting the community and tax payers. … We're going to do our part and I believe we are making a difference."


esilvestrini@tampatrib.com (813) 259-7837 Twitter: @ElaineTrib

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