Bogus Tax ReturnsCyber Criminals filed for more than $4 million in bogus tax returns. These cyber criminals used the names and Social Security numbers of other people, many of them deceased, according to a 74-count indictment unsealed in Arizona Thursday.

This scheme has been ongoing since 2005 and continued through 2008. The thieves, allegedly filing more than 1,900 fraudulent tax returns involving about $4 million in refunds directed to more than 170 bank accounts. The conspirators used numerous fake IDs to open internet and phone accounts and also used more than 175 different IP addresses around the U.S. to file the fake returns, which were often filed in bulk as if through an automated process.

According to authorities a 29-year-old California self-described hacker named Daniel David Rigmaiden, aka Steven Travis Brawner, was the ringleader of the group, who conspired with Ransom Marion Carter, III, 43 of Arizona and at least one other conspirator who was arrested in Utah 2008 and has not been identified in court records.

The IRS allows taxpayers to file their returns electronically and obtain their refunds through direct deposit to a bank account or to a pre-paid debit card, which lets them withdraw the funds from an ATM.

According to a revised indictment filed January 2010 (.pdf), the investigation, which involved agents from the IRS, FBI, and the U.S. Postal Inspection Service, began in May 2007, when the IRS zeroed in on a business bank account opened at Compass Bank in Arizona by Carter that appeared to be set up to receive fraudulent refunds. The account, in the name – Carter Tax & Accounting, accumulated $340,000 from 200 fraudulent returns, which Carter allegedly converted to cashier’s checks.

Read the full article. [Wired]

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