A Statewide Problem
Scams involving stolen identities and government funds appear to have become a statewide problem. In November, 18 students of Miami Dade College were charged with using their financial aid accounts to fraudulently obtain tax refunds from the federal government. This discovery was possible thanks to a tip off received by the FBI’s office in South Florida a few years ago regarding something called a “key” in street lingo, being used by cyber criminals in North Miami.
Young cyber criminals systematically hacking websites, by using the “key” which was a combination of names, birth dates, home addresses, and Social Security and driver license numbers obtained from five different business and government web sites.
This is another indication that white collar criminals are not punished enough.
Authorities believe the case is not yet over, even as the former and current students face upcoming trials and probable prison sentences. So much for extra credit!
Higher One Accounts Under Scrutiny
More arrests of MDC students are expected to happen in the coming months, on charges of stealing personal identities and government funds. Other students in undisclosed Florida colleges and universities are also under the scanner for similar scams involving student accounts administered by a Connecticut-based financial services company, namely, Higher One.
In a recent interview, US Attorney Wifredo Ferrer called the abuse of Higher One accounts a statewide problem, adding that there were other institutions such scams were happening.
MDC students were using stolen identities to file millions of dollars in fabricated income tax returns, which were discovered after the FBI unraveled the “key”.
The tax refunds were deposited into the students’ Higher One accounts which are actually meant to receive financial aid and tuition payments.
Higher One was contacted by agents regarding the suspicious money laundering.
FBI special agent Kristen Mulder testified at the June 2014 trial of one of the first students convicted of tax fraud, that over 1000 accounts had multiple Treasury checks going into student accounts through Higher One. All the suspected accounts have been frozen.
US Tax Attorney Wifredo Ferrer said that for kickbacks ranging from $100 to $1000 each, many students allowed their accounts to be used to launder the refunds. Some also participated in the identity thefts and in submitting fraudulent tax returns. Some are alleged to have recruited fellow students to permit their bank accounts to be used for receiving such tax refunds.
The 18 students along with three Target department store employees named in one case are charged with using the Higher One bank accounts to receive about $500,000 in fraudulent income-tax refunds between 2011 and 2013. According to the US attorney’s office, a total of 644 IDs have been stolen to collect $1.9 million in IRS refunds. Where is the death penalty when you need it? Some tax attorneys are of the opinion that such cases put a number of other genuine tax filers at risk for no fault of their own.
South Florida: The Capital of Twin Crimes
South Florida has been considered the capital of the twin crimes of stolen identities and tax refund frauds that began spreading five years ago. According to Ferrer, the Higher One scam is further proof of the widespread nature of stolen IDs and tax refund frauds in South Florida. The worst hit areas according to officials are South Florida, Atlanta, and the District of Columbia.