Inmates Scam the IRS

[Lone Gunman]

Inmates scam IRS big time
Prisoners rake in refunds from phony tax forms; few ever caught, punishe

Daniel G. Johnson was serving time at the Marana Community Correctional Treatment Facility near Tucson when he found a new way to make money from behind bars: He started ripping off Uncle Sam.

The 28-year-old forger, who worked in the private prison's library, sent fraudulent tax forms to the Internal Revenue Service seeking refunds of more than $200,000. Although tax schemes are rampant in Arizona's correctional systems, Johnson's case was exceptional because he was caught and prosecuted by the federal government.

This year, IRS officials detected $68 million in false tax refund applications filed by 18,000 U.S. prisoners for the 2004 tax year. That accounted for more than one-seventh of all phony refunds nationwide.

In Arizona, convicts were responsible for roughly half of the $600,000 in fraudulent claims detected by Department of Revenue investigators this year.

Tax-scamming is a longtime pursuit of America's prison denizens. But it has proliferated behind bars so much recently that congressional hearings were conducted during the summer to figure out how the system can be fixed.

Nancy Jardini, chief of IRS criminal investigations, told a House subcommittee that inmate fraud has increased 700 percent in three years.

"There is no question that prisoner refund fraud is on the rise," she said. "Even though prisoner returns comprised less than 1 percent of all individual federal income tax returns filed in 2004, more than 15 percent of false refund returns used prisoner names and taxpayer identification numbers."

By all accounts, the crime is exacerbated by a simple fact: Inmates have little incentive to stop because they seldom face punishment, from the justice system or prison administrators, when they are caught. Law enforcement authorities say they just don't have the resources to investigate criminals who are behind bars. So Daniel Johnson is the only inmate in Arizona to be convicted of tax fraud during the past two years.

The damage is not measured merely in dollars stolen from the U.S. Treasury. Tax fraud also represents a perennial headache for penal institutions, where the crime spreads like a virus from inmate to inmate, bringing money, contraband and violence into already volatile cellblocks.

"Any actual cash in an inmate's possession is dangerous in a prison environment," said Joe Profiri, a criminal investigations manager for the Arizona Department of Corrections. "It's a potential tick up for crime."

During the House subcommittee hearings, an anonymous inmate drove home that point by saying he had filed 700 false returns for $3.5 million worth of refunds. "The money and drugs eventually led to beatings," he said. It was unclear how much money he received.

Afterward, Rep. J.D. Hayworth, R-Ariz., dubbed the practice "Operation H & R (Cell)Block," adding, "It's time we put it out of business."

[Made in the USA]

Whatever happened to putting them on the "chain gang", so they wouldn't be able to have any "rights" anymore? Three meals a day, a warm bed, basketball court, weight room, private librairy; sounds more like they stayed in a "Holiday Inn Express" last night!!

[TexKan]

The Fleecing of Americans Continues..............