Miami Man, Charged in $12 Million Identity-Theft Tax Scam, Rides the High Life with Porsche, Jaguar, and More

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identity theftA 40-year-old Miami man has been arrested for allegedly filing fraudulent income-tax refund checks worth over $12 million.

He has been charged with “conspiracy to defraud the United States…theft of government money or property…and aggravated identity theft,” according to the affidavit filed in support of the criminal complaint.

From February-June 2012, a check casher in Perrine, Florida, allegedly cashed thousands of fraudulently obtained U.S. income tax refund checks worth over $12 million.

Prosecutors in Florida say the defendant used the proceeds from the tax scam to purchase two separate homes, a 2012 BMW 530i, a Porsche Cayenne, a 2012 Porsche Panamera, a 2012 Cadillac CTS, a 2012 Jaguar XF, a 2013 BMW X6, a 2012 Jaguar XJ, and a 2013 Bentley GT Coupe.

According to state of Florida employment records, the defendant has been unemployed since 2003.

Tax Fraud Surges

Is this latest arrest essentially pointless or will it really lead to needed enforcement of a wide-reaching problem?

After all, reports of tax-refund identity theft have skyrocketed, according to the Government Accountability Office.

The Internal Revenue Service identified 641,690 incidents of identity theft involving tax fraud in 2012 as of September 30, a nearly three-fold increase from the 232,142 incidents reported in 2011.

Sun, Sand, and Scams

Identity theft has been the top consumer complaint to the Federal Trade Commission for 13 years in a row, according to its Consumer Sentinel Network database of complaints. In 2012, the FTC received more than 2 million complaints overall, and 369,132 (or 18%) were related to identity theft. Of those, more than 43% related to tax-related fraud.

Where’s the crime taking place?

Turns out, according to the FTC’s report released last week, that the Sunshine State has the highest per capita rate of reported fraud and other types of complaints, followed by Georgia and Maryland.

Florida also had the highest per capita rate of reported identity theft complaints, followed by Georgia and California.

To put it into perspective, Florida ranked first in the “Complaints Per 100,000 Rank” with 361.3 complaints per 100,000 victims. In comparison, South Dakota ranked last with a mere 39.6 complaints per 100,000 victims.

According to a “Hidden Costs” video series from our friends at InsuranceQuotes.org, the economy loses an average of $22,346 for every time an identity is stolen. And to fully recuperate losses, repair credit and prosecute fraudsters, consumers, accountants, lawyers, and IRS officials can spend up to 5,000 hours, the equivalent of two years of full-time work on a single case.

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Elaine Rigoli

Elaine Rigoli is PRIVATE WiFi's manager of digital content strategy.