Krystle Marie Reyes of Salem, Oregon was arrested this week after authorities realized the $2.1 million tax refund they had provided her with was earned by way of fraud.
The 25-year-old had used TurboTax to falsely report wages of $3 million on her 2011 personal income tax return, making her case the largest fraud based tax scam by a single individual in Oregon history.
Reyes chose to have her cash placed on a Visa card and she may not have been caught for years had she not reported the card stolen and then asked for a new card to be sent.
The fraudster managed to spend more than $200,000 on a car and other items before authorities reviewed her case for a second time and realized her lies. The case was only reviewed because she had requested a new Visa card.
According to the Oregonian officials verified that Reyes made the purchases by using video surveillance tapes from local stores. By doing so they can prove she was responsible for the fraud under her own name.
It turns out several officials from the Oregon Revenue Department had reviewed the large tax return before it was ultimately approved and sent out.
According to communications director Derrick Gasperini a “human error” led to the refund being dispersed:
“Our processing system did flag (Reyes’ tax return) for manual review. We manually reviewed it and our internal controls failed. Someone did approve a $2.1 million refund.”
At this point lawmakers plan to investigate further to determine if this type of error is an anomaly or something that has to be fixed.
In the meantime $1.9 million has been returned to the state by TurboTax parent company Intuit.