Earlier this month, a federal grand jury in Pennsylvania indicted 16 people, most from New York with ties to Nigeria, in a massive identity theft and tax return scam that affected an estimated 11,000 people.
The group is accused of opening nearly 3,500 fraudulent bank accounts involving more than 440 financial institutions back in November and December 2005. They also used the stolen identities to submit tax returns claiming $38 million in refunds for tax years 2010 to 2013. More than $10 million of those fraudulent refunds were actually paid out by the IRS.
The fraudulent tax refunds were deposited into phony bank accounts, spent, deposited in the defendants’ bank accounts or sent to Nigeria, according to the indictment.
The group of thieves allegedly targeted people with “clean” stolen identities, meaning they were unlikely to file their own federal tax returns, for whatever reason.
They also used information from stolen information to obtain drivers’ licenses, Social Security cards, phone numbers, create phony email addresses and open phony bank accounts. The thieves used banks and credit unions in Pennsylvania, Colorado, Hawaii, Michigan, New Jersey, Washington state and the District of Columbia.
In Erie, Pa., Widget Financial Federal Credit Union’s Financial President/CEO Gail J. Cook, along with two other employees, uncovered the massive fraud scheme.
“This investigation began in December 2012 when an alert Erie credit union employee contacted the FBI to report suspected fraud related to several bank account applications submitted via the Internet that listed the same personal information (under) different names,” David J. Hickton, U.S. attorney for Pennsylvania’s Western District, said during a press conference in Pittsburgh.
“From the initial information, the FBI and IRS in Erie, Pa., working with the FBI and IRS in New York, Providence R.I. and Memphis discovered thousands of fraudulent bank accounts tied to this scheme that had been opened in hundreds of financial institutions throughout the country,” Hickton added during the press conference.
Two key defendants who face the most charges are Doherty Kushimo, 53, of Providence, R.I., and Abiodun Bakre, 50, of Ozone Park, N.Y. If convicted, Kushimo will face up to 38 years in prison and Bakre will face up to 36 years. Others involved face up to 20 years in prison if convicted.