Home > Identity Theft > 9 Plead Guilty to $20M Scheme to Defraud Soldiers

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Eight Alabama residents and one Georgia resident pleaded guilty to participating in a scheme in which they stole thousands of identities to file more than 7,000 false tax returns, according to the U.S. Attorney’s Office of the Middle District of Alabama. Over the course of nearly three years, the group defrauded the government of approximately $20 million. A 10th accused conspirator is scheduled to appear in court April 6.

The group collected identifying information from a variety of sources, including a military hospital. Defendant Tracy Mitchell of Phenix City, Ala., worked at a military hospital in Fort Benning, Ga., where she had access to service members’ identifying data, including information about soldiers deployed to Afghanistan, according to a news release about the case. Court documents cited in the release say Mitchell used the information she accessed at the hospital to file fraudulent tax returns.

Other defendants took data from the Alabama Department of Corrections, a call center in Georgia where two of the defendants worked and two unnamed Alabama state agencies. This went on between January 2011 and December 2013.

Identity thieves favor the tax-return tactic as a way to cash in on sensitive data, which they can get by breaking into databases containing the information (aka a data breach) or following people’s paper or electronic footprints.

The success of a tax-related identity theft scheme depends upon thieves filing fake tax returns early in the season before victims do. This leads to a delay in refunds for those who are entitled to them, not to mention the hassle of straightening out identity theft and dealing with the consequences of someone using your personal information. Losing control of your Social Security number may mean years of identity theft problems, which can take time to fix.

Additionally, identity theft can lead to damaging information on your credit report, potentially hurting your credit standing and everything it’s used for, like getting loans or applying for an apartment. To look for potential signs of fraud, you can get your free annual credit reports from AnnualCreditReport.com, and you can get a free credit report summary, updated monthly, on Credit.com.

More on Income Tax:

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