Two years after local police stumbled on what the first active tax-refund fraud operation they had seen, two of the suspects were arrested Wednesday on federal charges.
The two were among 16 people, many described by Tampa Police as "pioneers" in tax refund fraud, who were picked Wednesday up on state and federal charges.
Marterrence "Quat" Holloway, 33, and Maurice "Thirst" Larry, 26, along with a third person not yet charged, are believed responsible for more than $2.5 million in tax refund fraud, said John Joyce, special agent in charge of the Tampa office of the Secret Service.
"They’re real big," said Tampa Police Det. Sal Augeri. "They’re some of the more well known people involved with the tax refund fraud scheme."
Both men pleaded not guilty at an arraignment in U.S. District Court. Holloway’s lawyer told U.S. Magistrate Elizabeth Jenkins the defendant has 17 siblings and seven children of his own.
For Augeri, Wednesday’s arrests by IRS agents are a sign that law enforcement may finally be getting a handle on a problem that has vexed police for more than a year.
The scheme – known on the street as "TurboTax" or "drops" – has exploded in the last two years, with Tampa leading the nation. Authorities say thieves here have stolen hundreds of millions of dollars from federal taxpayers by using stolen personal information to file tax returns and obtain fraudulent tax refunds.
Nationwide, thieves have stolen billions this way.
Since last year, Tampa police have expressed frustration over legal obstacles they faced in going after the fraud. On Wednesday, Augeri, who testified before Congress about the issue in March, said, "I think we’ve turned a corner … I would say it looks 100 percent better than it did last year."
Tampa Det. Bernie Ginaitt was able to make use of a pilot program by the IRS that allows identity theft victims to sign waivers giving law enforcement access to tax returns filed in their names.
Until the program was instituted, police were legally blocked from obtaining evidence they needed to assemble criminal cases.
Ginaitt said the process is tedious, but it has begun to bear fruit. When suspects are found with preloaded debit cards in other people’s names, Ginaitt said, he tracks information about the victims by going to the banks and then finds the victims and sends them waivers to sign.
Ginaitt said he has found local suspects with information from victims who live from Maine to South Florida.
Holloway’s home on East Caracas Street was searched last year by authorities during an investigation dubbed "Operation Rainmaker."
According to records, Holloway and Larry had been arrested a year before in September 2010 at the Howard Johnson hotel on North 50th Street. It was the fist time Tampa Police found an active tax fraud operation, Augeri said. Before that day, police had heard talk on the streets. But they had never actually seen it happening.
When officers entered the hotel room during a drug investigation, they smelled marijuana and saw drugs. After Holloway and several other people were removed from the hotel, officers found four laptop computers they say were being used to file fraudulent tax returns.
There also were lists of personal information with more than 1,000 names, as well as debit cards and financial records. Holloway ultimately faced only drug charges in that arrest as police struggled with the legal barriers to bringing tax fraud cases.
Now, Augeri said, "There are numerous people that are equivalent to them in terms of the amounts (of fraud) they do. They’ve become, kind of like, with their names, really associated with this. But the problem is big enough that there are numerous people that are bigger than them. They just got there quicker than these other people."
Augeri said the pair has led a free-spending life, far beyond what their reported legitimate income should allow. Larry, for one, has been a jet setter, flying between Miami, New York and Law Vegas. The two have been driving expensive cars and wearing expensive clothes.
As part of Wednesday’s operation, investigators from several agencies – including IRS Criminal Investigations, Secret Service, U.S. postal inspectors, Tampa police and the Hillsborough County Sheriff’s Office – searched a home at 10917 Dunscore Cottage Way in Wimauma.
There, authorities found at least 40 fraudulent debit cards, as well as multiple ledgers with thousands of names and personal identifiers, Assistant U.S. Attorney Kelly Howard-Allen told Judge Jenkins during Wednesday’s arraignment.
Also found was $5,000 in cash and a firearm. A woman who lived there, identified as Larry’s girlfriend, Rashia Wilson, was arrested on a state firearms charge.
Howard-Allen said Larry and his girlfriend were caught at a hotel in May of this year with 60 to 100 fraudulent tax returns.