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Crime & Courts

Law enforcement prepares for tax fraud season

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Published:   |   Updated: March 13, 2013 at 09:13 AM
TAMPA -

The good guys and the bad guys are getting ready for tax season.

Just like last year and the year before that, authorities say, local crooks are stealing personal identifying information, studying different ways to commit fraud and filling out electronic forms, ready to hit the "send" button as soon as the federal government starts accepting tax returns on Jan. 30.

Unlike past years, though, law enforcement officials say they are ready, too.

After two years of frustration, investigators say 2013 may be the year when they make a difference in curbing tax refund fraud.

"Out of all the years past, were more prepared this year than we ever have been," said Cpl. Bruce Crumpler of the Hillsborough County Sheriff's Office.

"I have the utmost confidence that this is going to be a very good year," said Tampa Police Sgt. Pat Kennedy. "Are we going to stop it? No. But can we put a pretty good dent in it? I'm very hopeful."

Officials say that with long-sought leadership and assistance from the Internal Revenue Service, they are ready to aggressively fight the fraud that has exploded in the Tampa area, where crooks have taken hundreds of millions of dollars from federal taxpayers by using stolen personal information to file bogus tax returns to obtain fraudulent refunds.

Authorities say they hope to make hundreds of arrests at every level, from people who steal and trade personal information, to those who file fraudulent tax returns to businesses that profit by cashing fraudulent checks for pennies on the dollar.

One source of the newfound cooperation with the IRS is Jim Robnett, who last summer took the helm of the local IRS Criminal Investigations Division. Robnett said tax refund fraud is his No. 1 priority.

Shortly after his arrival in Tampa, Robnett reached out to other law enforcement agencies, creating the "Alliance," a collaborative effort that includes representatives from at least six counties, as well as state and other federal offices.

The first meeting of the Alliance last August was "standing-room only," said John Joyce, the head of the Tampa office of the Secret Service, which investigates identity theft. Joyce said Robnett has continued the meetings which remain well attended.

While officials were quick to praise Robnett and the assistant agent in charge, Ismael Nevarez Jr., they hesitated to criticize predecessor, Linda Osuna, who left the office last spring.

"Let's not go there," Kennedy said. "You can obviously understand. We've built this alliance. It would take us back to discuss their predecessors."

Others said it's also not fair to hold the local IRS officials responsible for issues that were endemic to the tax agency which was not used to street crime on this scale. They also said there has been a learning curve, too, for local law enforcement officers who were unfamiliar with the restrictions placed on federal tax investigations.

They are about to learn much more. As part of the renewed effort to investigate criminal tax fraud, the IRS also plans to deputize more than 25 law enforcement officers – including six each from Tampa police and the Hillsborough sheriff's office – giving them supervised access to tax records needed for investigations after training them on the agency's policies and procedures.

Robnett said this will be a "force multiplier" for the IRS, enabling other law enforcement officers to bring federal cases. But he stressed taxpayer information privacy will still be protected.

"It isn't setting all local law enforcement loose to look at tax information at just a moment's notice without still keeping it private and handling it carefully," Robnett said.

Kennedy said IRS criminal investigators have been "phenomenal" in working with other law enforcement agencies.

Contrast that with this time last year when Tampa Police Chief Jane Castor was openly skeptical about IRS efforts to stop tax fraud. And Detective Sal Augeri, asked if he was making a difference in stopping the crime, said, "No. Not at all."

For nearly two years, officers felt almost helpless as they said criminals, knowing they wouldn't be punished, brazenly stole millions from federal taxpayers, not even bothering to hide the evidence. Some even made online music videos celebrating what they called "TurboTax" after the popular online filing program.

"In the past, it's been very, very frustrating," Castor told the Tribune last week. But now, "Everybody's working well together, and if we can make some of these high profile cases and let everyone in the public know these types of violations are not going to go unnoticed, then I believe we can make a positive impact."

U.S. Attorney Robert O'Neill said to turn this around, authorities will have to convince the criminals that the cost of committing the crime is too high.

"What I think is what needs to be out there the thought process that if I engage in this crime, I'm probably going to get caught and go to jail," he said. "There's always that cost-benefit analysis and in the past it has been, 'I'm not going to get caught. Nothing's going to happen to me.'"

The proof of law enforcement success, O'Neill said, "is going to be in the number of cases brought. … There is no reason why hundreds of people are not going to be prosecuted" this year.

That would dwarf the cases brought in Tampa federal court so far, where eight people were indicted or charged by federal prosecutors with tax refund fraud offenses in 2011 and 18 in 2012.

But law enforcement officials say the problem will not be solved by police work. The real solution has to come from the IRS, which has to stop issuing the fraudulent checks.

In the past, the IRS has said it had enhanced its screening filters, but law enforcement said the crooks managed to con the agency into sending checks anyway.

The IRS says this year, the filters are better.

Testifying before Congress in November, IRS Deputy Commissioner Beth Tucker said the filters had prevented the issue of $1.5 billion in erroneous refunds in 2012. "We are adding even more identity theft filters for the 2013 filing season," she said.

Asked why the public should have confidence the filters will work now, when criminals have circumvented them in the past, the IRS issued a statement: "Identity theft and refund fraud is a top priority for the IRS. … We have dramatically enhanced our systems, and are committed to continue improving our prevention, detection and victim assistance efforts."

With all the optimism among law enforcement, officials say they're playing a cat and mouse game, trying to adapt faster than the criminals evolve. Totally eliminating the fraud may not be possible, but authorities are hopeful.

"There are those that are probably still (going to be) successful," Joyce said, referring to the thieves. "But their time will come. I think over time, this will be a crime that won't be successful."

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

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