
Father and Daughter Convicted for $100M Fraudulent Tax Refund Scheme - Lagogarda
https://www.justice.gov/usao-sdfl/pr/fort-lauderdale-father-and-daughter-convicted-trial-involvement-100-million-fraudulent
======
dang
Earlier part of the story: [https://www.justice.gov/usao-sdfl/pr/daughter-
father-charged...](https://www.justice.gov/usao-sdfl/pr/daughter-father-
charged-filing-lottery-ticket-tax-refund-claims-seeking-175-million)

Submitted article was [http://www.idahoreporter.com/2019/florida-man-
got-3-4-millio...](http://www.idahoreporter.com/2019/florida-man-
got-3-4-million-in-tax-refunds-from-irs-after-claiming-to-win-lottery-he-
never-won-authorities-say/) ("Man got $3.4M in tax refunds from IRS after
claiming to win lottery he never won"). Changed via
[https://news.ycombinator.com/item?id=21873501](https://news.ycombinator.com/item?id=21873501).

------
nostromo
Tax refund fraud is big business.

These two are not very smart. The smarter criminals steal someone’s identity,
file a fraudulent tax form using their identity, steal the refund, and then
let that poor soul deal with the IRS when it comes after them to get their
money back.

If you ever try to file and get a notice that you already filed, jump on it
right away because you may have been targeted.

~~~
onetimemanytime
You'd better be a Mother Russia citizen and have a way to transfer funds there
since there's no extradition. Otherwise they'll spend 100X your fraud to get
you.

But I guess, years pass by the time a human looks at it

~~~
brianwawok
It took 100m of fraud to get caught. Would they have gotten away with 1m?

~~~
xnyan
Everything about what they did was not well thought out. The way to do this
scam with far less risk is with a stolen identity. They had the fraudulent
refunds deposed into their own personal accounts and even tried to take the
money and run after they knew for a fact the IRS had already caught them.

That said on $100mil of claims, the IRS only paid out 2.4% of that. At that
rate, a $1mil claim nets you only $24K. I don't think I would fuck with the
IRS for any amount of money (easier ways to steal I think) but for the risk a
$2.4mil payout sounds a lot more plausible of a motivation than $24K does.

~~~
sokoloff
The question is whether the 2.4% was smooth across all filings, or whether it
was 100% of the first million, 50% of the next million, etc as the computer
system flagged things as unusual.

------
drakenot
I'm surprised at the large sums of money the IRS was willing to send out with
essentially zero validation.

These people were claiming they had paid the IRS millions of dollars and were
due massive refunds, but there is nothing in place to check what the IRS has
_actually_ received from individuals before cutting 6-7 figure checks?

~~~
xyzzyz
There are lots and lots of legitimate refunds of this quantity. IRS doesn't
have enough resources to look too hard at each one of them, as the wait time
for refunds would then be unacceptable.

~~~
boublepop
No matter the quantities and amounts, any system or process where “I payed you
X give it back” results in performing a payment without checking the assertion
is fundamentally flawed.

If you can’t prove the assertion don’t make the payment, no matter how many
months that means people might have to wait.

~~~
zingermc
Eh, I see this as a form of eventual consistency.

------
chrisbennet
The IRS is starved for funds. The powers at be (wealthy) wouldn't benefit from
aggressive enforcement of tax law.

[https://www.propublica.org/article/how-the-irs-was-
gutted](https://www.propublica.org/article/how-the-irs-was-gutted)

~~~
fortran77
Sorry, but it's not the "wealthy" who are robbing us blind. There are tax
cheats across all socio-economic levels.

For example a full 50 percent of people who took the "first time home buyers
tax credit" did so fraudulently:

See:
[https://www.npr.org/templates/story/story.php?storyId=114008...](https://www.npr.org/templates/story/story.php?storyId=114008700)

"In a recent audit, George's office highlighted nearly $500 million in
homebuyer tax credits claimed by people who don't appear to qualify."

and

[https://media.npr.org/assets/news/2009/10/22/tigta.pdf](https://media.npr.org/assets/news/2009/10/22/tigta.pdf)

People in prison who didn't even own houses were applying for and getting the
credit:

[https://www.npr.org/templates/story/story.php?storyId=128053...](https://www.npr.org/templates/story/story.php?storyId=128053710)

[https://www.eitc.irs.gov/tax-preparer-toolkit/frequently-
ask...](https://www.eitc.irs.gov/tax-preparer-toolkit/frequently-asked-
questions/fraud/fraud)

IRS has data that 26 percent are, to put it nicely, claimed "in error". No
wealthy people are doing this. It's impossible.

~~~
ouid
$500 million is less than 2 dollars per person. If I forget to declare the 6
dollars that my neighbor paid me to feed his dog one day last week, I have
committed more tax fraud than you have just brought up.

You either have no capacity to understand economics at the scale of the US
government, or you're intentionally misrepresenting it.

~~~
fortran77
Each individual committing this fraud has stolen between 2 and 8 thousand
dollars. I don't think that's OK.

------
ngold
Still paid out with no other corroborating anything. Makes you wonder how
often this happens with people that actually have money, and could turn around
and say woops.

"According to the affidavit, K. Edmonson filed a fraudulent tax return in
September 2017 seeking a refund of approximately $725,111. The return
contained false and fraudulent claims that K. Edmonson had paid a substantial
amount of withholding taxes. The IRS did not receive corresponding forms to
support the claimed payments. Despite the false nature of the tax return, on
January 28, 2018, the Department of Treasury mailed a tax refund check to K.
Edmonson for $734,266.27 (including $9,036.27 in interest). Shortly
thereafter, K. Edmonson deposited this tax refund check into his bank
account."

~~~
bluejekyll
Could the IRS have done this to get a larger conviction based on him actually
taking the money?

Rather than just a charge of committing fraud on the tax returns, it’s also
now an added charge of stealing the money.

------
1f60c
It will never cease to amaze me that the US DOJ and media publish full names.
In The Netherlands, only the first name and the first letter of the last name
will be made public—and the full name could remain a secret for many years.

~~~
rapnie
That amazes me too, especially since people might still be innocent.

They do this in other countries too. Like Belgium, where after the Zaventum
airport bombings the wrong guy was arrested as 'the terrorist with the hat
that got away'. His full name published all over the place. His life destroyed
now, lost girlfriend, friends, job, etc. Plus Belgium police keeps arresting
him to nail him for something, anything really, to make good for their initial
blunder.

~~~
4ntonius8lock
It has to do with the concept of government transparency. In the US, from what
I understand, the founders of the country feared secret courts issuing secret
sentences for secret reasons.

So the idea is that almost all government stuff is public information. It's
why FOIAs are so powerful. Literally anyone can ask the government to open up
it's docs on virtually anything as long as national security isn't involved
(and this is abused, but to a degree only) it has to comply.

Now, such a tool will inevitably have good and bad. Just as having private
court cases will also.

Personally I think we need to create a privacy reform similar to the Civil
Rights act of 1964 to address this and many other concerns. I'm simply
explaining the thought process where our current tradition came from.

Florida actually has much broader public information laws than the rest of the
country. That's why you see so many 'Florida man' stories. My understanding is
FL takes it a step further than just being public, they publish much of it by
default, making it easy for reporters to sift through and find headlines.

~~~
jdmichal
The Florida laws are colloquially known as the sunshine laws. And it's not
just public records. It also includes pretty much all meetings between
officials, even informal ones. And it also includes judicial records, which is
why Robert Kraft's defense cares so much about suppressing the video from his
case.

[https://en.m.wikipedia.org/wiki/Freedom_of_information_legis...](https://en.m.wikipedia.org/wiki/Freedom_of_information_legislation_%28Florida%29)

------
olliej
Wait, so they report earning some large amount of money, and claim they
overpaid taxes on that? And then get a refund?

... is that seriously all it took?

~~~
patio11
The IRS accepts most statements made regarding facts on return unless there is
clear error, in particular because refunds are due (per statute) much faster
than the IRS is able to gather all relevant information on whether it is
factually owed or not in some edge cases.

The backstopping function is that stealing from the IRS is a really bad idea
because you'll probably be interacting with them the rest of your life and
because you probably want access to the US financial system at some point.

~~~
deepspace
> The backstopping function is that stealing from the IRS is a really bad idea
> because you'll probably be interacting with them the rest of your life

Unless you are a foreign criminal stealing a US citizen's identity, in which
case you don't care a hoot about their future relationship with the IRS.

------
ksec
Related Topic:

You have to Paid Tax for Winning Lottery in US? Assuming that is how the
Refund is taking place because of prior tax paid.

What other countries have similar law? I was always under the impression Lotto
is free from Income tax, at least that is the case in UK and AUS.

The _tax_ system in US, judging from reading online media, especially with
filing tax, credit, etc are so complex and felt so foreign to many abroad,
where really dont have to do much.

~~~
drdec
In the US, all the lotteries are run by states, not the feds. The state has no
standing to forgive your taxes due to the federal government. So one would
also have to pay federal income tax on lottery winnings.

From there it varies by state. Some states tax the winnings (e.g. New York),
others do not (e.g. California) and some states of course do not have income
tax at all.

~~~
ksec
Arh I see. That make sense, Thank You.

( Not sure what's with the downvote )

------
axaxs
65 years for tax fraud? I mean, it's scummy, sure, but that long? First
degree, premeditated murderers get less...

------
tptacek
Is this a real site? It looks fake, and the writing is super weird.

Here's the DOJ version:

[https://www.justice.gov/usao-sdfl/pr/daughter-father-
charged...](https://www.justice.gov/usao-sdfl/pr/daughter-father-charged-
filing-lottery-ticket-tax-refund-claims-seeking-175-million)

It has more information, is better written, and is from April.

~~~
dang
Ok, changed to that from [http://www.idahoreporter.com/2019/florida-man-
got-3-4-millio...](http://www.idahoreporter.com/2019/florida-man-
got-3-4-million-in-tax-refunds-from-irs-after-claiming-to-win-lottery-he-
never-won-authorities-say/). Thanks!

~~~
gruez
It really should be [https://www.justice.gov/usao-sdfl/pr/fort-lauderdale-
father-...](https://www.justice.gov/usao-sdfl/pr/fort-lauderdale-father-and-
daughter-convicted-trial-involvement-100-million-fraudulent), because he was
convicted a few days ago.

~~~
dang
We'll change to that above and point to the previous link. Thanks!

~~~
belorn
A meta question, but why was everything from the comments to the title
initially attributing everything to the man? The 35 year old woman spent twice
many years doing this, claimed 2.4 millions compared to the 0.7 million that
the man did.

Even ordering the father before the daughter looks odd but it is at least the
original title, but the whole thing looked out of place here on HN.

~~~
dang
I don't know, but let's not fly too close to the black hole of gender
flamewar.

~~~
belorn
It was a failure in communication on my part to frame it as a question as that
indeed only lead to flamewars. My intent was to simply voice criticism of the
fact that it happened and that it seemed to go on unnoticed for a fairly long
time.

