New Form of Identity Theft Claims Victims in Jacksonville

A new kind of identity theft is exploding around the country. In Jacksonville, 17 people were indicted for identity theft and bank fraud. And the worst part is that this crime is usually committed by someone to whom you have entrusted your personal financial information.

The scam in Jacksonville was run by several Citibank employees, who stole at least 185 customers’ identities in several states. Many were elderly, while others were children or deceased. The Citibank employees submitted tax returns in the customers’ names, claiming $500,000 in refunds, and about $340,000 was paid by the IRS.

The scam also included employees of the VyStar Credit Union, whose accounts were used to collect the refunds from the IRS. The scheme was uncovered by VyStar, which became suspicious when it saw multiple tax refunds being deposited in one account, especially refunds destined for people who are not Florida residents.

The IRS’s program to increase e-filing has led to an explosion of tax fraud cases of this type. The IRS uncovered more than a million cases of tax-identity theft in 2011, up from only 50,000 in 2008. Some fraud cases involved tax preparers, who modified the bank routing information so that the return ends up in their accounts. Such preparers often increased the amount of the refund, stealing only the difference so the customer will never know, unless his return is later audited. Other preparers use information from previous years to file a new return.

If you believe that you have been the victim of tax identity theft, we will help you pursue your case with the IRS. The easiest way to prevent this new form of theft is to file your return on paper, and ask the IRS to send a paper check to your address. It will take longer to get your refund, but you will know that the refund will end up in the right hands.