Federal authorities have uncovered a widespread scheme that may have defrauded the Internal Revenue Service (IRS) out of billions of dollars using the stolen identities of Puerto Rican citizens, according to a recent report from the Wall Street Journal.
“The perpetrators of the scheme, authorities say, swipe the Social Security numbers of Puerto Rican citizens, who don’t have to pay federal income tax—and are less likely to be on the IRS radar—and use their information to file fake returns,” the report adds. ”In some cases, they enlist U.S. mail carriers to intercept the refund checks that are disbursed [emphasis added].”
Dating back to 2007, the plan involves participants from both the U.S. and Latin America. Two sources claim the scheme was led by a group from the Dominican Republic. And although prosecutors have managed to obtain several convictions, they don’t think they’ve come close to catching the operations “top players.”
“What we have uncovered may very well be the tip of the iceberg,” said Manhattan U.S. Attorney Preet Bharara, whose office was among the first to investigate the group. “It’s a massive fraud.”