Five Arrested For IRS Impersonation Scam, Accused Of Scamming $2 Million

Five men were arrested Tuesday for suspected involvement with a massive IRS impersonation scam. The five men are accused of scamming about $2 million in fake tax payments. Authorities say that the larger IRS impersonation scam has cost victims about $36.5 million, and that additional perpetrators are still at large.

According to a press release from the office of the Treasury Inspector General for Tax Administration (TIGTA), five men were arrested in Miami, Florida, on May 23 under suspicion of participating in an IRS impersonation scam. Court documents reveal that the suspects engaged in wire fraud by impersonating IRS agents and attempting to extort money from victims under the guise of demanding tax payments.

irs impersonation scam at walmart
Victims of the IRS impersonation scam are often directed to drive to their local Walmart to send money. [AP Photo/Jae C. Hong, File]

The scam involved each of the suspects contacting victims via telephone. The suspects would then claim to be IRS agents, claim that the victims owed outstanding taxes, and demand immediate payment. Victims were instructed to pay via methods like MoneyGram and Walmart-2-Walmart. In cases where the victims were reluctant to pay, they were threatened with immediate arrest for failure to pay their nonexistent tax debts.

The IRS does not collect tax payments via services like MoneyGram, and the agency typically initiates communication via U.S. mail, but about 6,400 people around the country have fallen for the IRS impersonation scam anyway. According to TIGTA, the scam has resulted in about 6,400 victims paying more than $36 million to fake IRS agents, or about $5,700 per victim.

The men arrested in Florida on May 23 only account for about $2 million worth of the $36 million IRS impersonation scam, but they are suspected of defrauding about 1,500 total victims.

“These arrests indicate that TIGTA is making significant progress in our investigation of the IRS impersonation scam that continues to sweep the country,” Inspector General J. Russell George said via press release. “The scammers are relentless and so are we. Our investigators will not rest until we have brought each individual involved to justice.”

The five suspects were arrested by TIGTA agents with help from the Social Security Administration, Office of Inspector General, and the U.S. Senate Special Committee on Aging.

USA Today reports that two of the arrests were also identified by information received from a fraud hotline set up by the U.S. Senate Special Committee on Aging.

According to a press release issued by that committee, the call was placed in October, 2015, by a woman who reported suspicions that her husband had been scammed. She said that a man had contacted her husband claiming to be an IRS agent. The man demanded that her husband drive to his local Walmart and wire $2,000 via MoneyGram.

The victim crashed his car while driving to the local Walmart, but he was so convinced that the fake IRS agent would really put him in jail that he left the scene of the accident, walked the rest of the way to the store, and wired the money.

irs impersonation scam arrests committee on aging
Arrests made in connection with the IRS impersonation scam depended in part on work by the Senate Committe on Aging. [AP Photo/Manuel Balce Ceneta]

“No legitimate United States Treasury or IRS official will demand that anyone make payments via MoneyGram, Western Union, Walmart-2-Walmart, or any other money wiring method, for any debt to the IRS or the Department of the Treasury,” Inspector General George said via press release. “Nor will the Department of the Treasury demand that anyone pay a debt or secure one by using iTunes cards or other prepaid debit cards.”

The Inspector General further instructs that if you receive a call from anyone who claims to be an IRS agent, you should “Hang up on these fraudulent callers and go to the Treasury Inspector General for Tax Administration (TIGTA) scam reporting page to report the call.”

It may seem like common sense that the IRS would never collect tax payments via iTunes gift cards, or any kind of prepaid card or gift card, but scammers have successfully conned taxpayers into doing so. A special notice issued by TIGTA warns that no request for funds via these methods will ever come from a legitimate IRS agent.

“As a reminder, scam callers may also request payment of taxes on Green Dot Prepaid Cards, MoneyPak Prepaid Cards, Reloadit Prepaid Debit Cards, and other prepaid credit cards. These are fraudulent calls. Any call requesting that taxpayers place funds on an iTunes Gift Card or other prepaid cards to pay taxes and fees is an indicator of fraudulent activity!”

TIGTA operates an IRS impersonation scam reporting page, where victims are able to report suspicious activity. Whether or not you actually suffered a financial loss, TIGTA urges taxpayers to report suspicious activity that could lead to further arrests.

[Photo by AP Photo/Susan Walsh, File]