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IRS Employee Stole Data To Forge $8M In Fraudulent Returns

timothy posted more than 2 years ago | from the but-they-love-you-at-heart dept.

Crime 151

coondoggie writes "A former Internal Revenue Service employee this week got 105 months in prison for pleading guilty to theft of government property and aggravated identity theft in a case where the guy tried to get away with nearly $8 million in fraudulent tax returns. The U.S. Department of Justice said Thomas Richardson used his inside knowledge of IRS operations to commit his crime, which was pretty audacious. According to the DOJ, Richardson admitted that within a two-day period, April 15 to April 17, 2006, he filed or caused to be filed 29 fraudulent 2005 individual income tax returns totaling $7,922,657."

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What!?! (0)

Anonymous Coward | more than 2 years ago | (#39001955)

I thought I could trust those guys!

In America... (4, Funny)

whoever57 (658626) | more than 2 years ago | (#39001961)

In America...
you tax IRS!

Obvious answer.... (1)

J4 (449) | more than 2 years ago | (#39001967)

Crucify him!

Re:Obvious answer.... (1)

sconeu (64226) | more than 2 years ago | (#39002061)

Send him to Gitmo!!! He's obviously an Terrorist Evildoer(tm) bent on destroying the American Economy!!!

Re:Obvious answer.... (1, Flamebait)

sco08y (615665) | more than 2 years ago | (#39002493)

Send him to Gitmo!!! He's obviously an Terrorist Evildoer(tm) bent on destroying the American Economy!!!

Haven't you heard? There's a Democrat in the White House, so Gitmo and the drone strikes are no big deal [washingtonpost.com] .

Re:Obvious answer.... (1)

Anonymous Coward | more than 2 years ago | (#39002729)

They are a big deal if you are a Republican who insists on preventing the President from closing Gitmo

Re:Obvious answer.... (0)

Anonymous Coward | more than 2 years ago | (#39003001)

He's CinC -- are you telling me he can't order the troops there to pack up & fly home, possibly turninng the prisoners over to a local police department or the FBI?

Re:Obvious answer.... (0)

Anonymous Coward | more than 2 years ago | (#39003105)

They are a big deal if you are a Republican who insists on preventing the President from closing Gitmo

The current president tried to close Gitmo, but no country was willing to take the prisoners. (just like the last one)
The current president didn't want to look bad, so he just signed the National Defense Authorization Act which allows prisoners to be held there indefinitely (which the last president wanted to get that authorization, but couldn't).
The current president has restarted the military tribunals saying that they are the best way to serve justice (the last president said the same thing).
The current president is even holding prisoners cleared for release by the military which is helping to keep Gitmo open.

So I think it's safe the conclude that to the current president, Gitmo is no big deal. The current democratic president (the last time I checked) is preventing the closure of Gitmo just fine w/o the help of the republicans.

I guess you can accuse the republicans of trying to win the presidency in 2012 to prevent the current president from closing down Gitmo, but there apparently isn't any danger of that (between the current field running against the current president, and the fact that the current president is apparently doing even more than the last president to keep it open).

Re:Obvious answer.... (0)

Anonymous Coward | more than 2 years ago | (#39003219)

Or if you are a Republican who insists on making the President close Gitmo.
Or if you are a Democrat who insists on making the President close Gitmo.
Or if you are a Republican who insists on preventing the President from closing Gitmo.

Unfortunately/fortunately the number of people that satisfy the above 'if' is very small. So it ends up being a no big deal anyways.

Re:Obvious answer.... (1)

nbgm (2558441) | more than 2 years ago | (#39003711)

Put him in an empty hangar together with IT contractors who are not allowed to bill 50% more for Saturday hours because of IRS regulations. Hang pictures of Joe Stack on the walls and leave plenty of equipment (that may or may not normally belong to a hangar) - chainsaws, nails, wooden poles... When all leave, call 911 and attach feeding tubes so he's kept alive. Open the hangar to visitors, while he's still alive. Send free invites to all IRS employees. Organize bus trips from IRS offices to the site. When he eventually dies, mummify the body and include pictures of it in all IRS manuals, on the same page as quotations about death and taxes.

Re:Obvious answer.... (4, Funny)

martin-boundary (547041) | more than 2 years ago | (#39002069)

Crucify him!

Oh. I was going to say "Does he have internet access in prison? Can slashdot interview him?". But crucifying is probably more humane...

Cheaters (2, Funny)

Nidi62 (1525137) | more than 2 years ago | (#39001971)

They don't just try to cheat us, they try to cheat each other!

Re:Cheaters (0)

Anonymous Coward | more than 2 years ago | (#39002053)

i have no problem paying taxes. in fact i couldn't complain about how crappy some things are if i wasn't but seriously this makes me angry.

Re:Cheaters (5, Informative)

Anonymous Coward | more than 2 years ago | (#39002677)

I have a big problem paying taxes the way they are.

The IRS can go straight to hell. Nowhere else in America are you guilty till proven innocent and due process does not exist. You can be put in jail with all of your assets seized, which greatly inhibits your ability to defend yourself. Unless they really do charge you criminally, you are not provided with a defense in a case where you already guilty.

Add to this the fact that the average IRS is a fucking retard when it comes to accounting, tax laws, corporate structures, etc. and they still have the ability to outright destroy your ass with their ignorance, in many cases with no oversight or accountability .

I speak from experience. When you are in an oil and gas state and you can get some arrogant sociopathic retarded fucktwat from several states away who thinks he knows about your industry better than accountants and regulators and incorrectly over charges you millions, it might piss you off. Just a little.

Fought it in court viciously for over 9 years at the cost of nearly a million dollars. In the end, other people in the IRS were finally brought in to audit it, and lo and behold, they were wrong the whole time.

Made those fuckers pay interest and on the wall in the office is a framed check from the IRS for well over 7 million dollars.

Rot In Hell.

I am not surprised at all by this. Not even the slightest. What I am surprised about is that they don't catch them doing it more often.

IRS needs to be completely razed to the ground and a new system put into place. No wonder I am big huuuuuggge fan of taxing consumption and not wealth. Not only is it passive to citizens, but a hell of lot easier to understand. Disagree with me for sure, but that fucking group of psychopaths needs to be taken care of.

Re:Cheaters (2, Insightful)

cforciea (1926392) | more than 2 years ago | (#39002717)

Consumption taxes are not inherently simpler than income taxes. The core reason behind conservatives arguing constantly for a flat consumption tax is that they are tired of progressive taxes and really would prefer taxes to be regressive. It has very little to do with the IRS or your plight.

Re:Cheaters (4, Insightful)

ScentCone (795499) | more than 2 years ago | (#39002931)

tired of progressive taxes and really would prefer taxes to be regressive

Nice straw man there. No, not regressive. Flat. Telling half the people in the country that they don't need to pay income taxes is no way run a civil society. Not if they still get to vote, anyway.

Re:Cheaters (0)

retchdog (1319261) | more than 2 years ago | (#39003003)

half, huh? i didn't know there were that many people living on capital gains.

Re:Cheaters (0)

Anonymous Coward | more than 2 years ago | (#39003045)

Worse than that, with half the country on the teat, the IRS is running a social program.

Re:Cheaters (1, Flamebait)

phantomfive (622387) | more than 2 years ago | (#39003135)

Consumption taxes are inherently regressive. Even if you manage to flatten them out with rebates, typically the middle class ends up paying the highest rate. Which is why, although I want a flat, across the board tax, I will never support a consumption tax.

Re:Cheaters (0)

ChrisMaple (607946) | more than 2 years ago | (#39003279)

Consumption taxes are inherently regressive.

People who make that claim are inherently liars.

Re:Cheaters (0)

phantomfive (622387) | more than 2 years ago | (#39003295)

People who make that claim are inherently liars.

What a rebuttal. You're a genius.

Re:Cheaters (5, Informative)

TheRaven64 (641858) | more than 2 years ago | (#39003899)

No, they're people with a basic grasp of economics. A person earning minimum wage has to spend all, or close to all, of their income on things that will be taxed with a consumption tax. A person with a comfortable middle class income will be able to spend maybe half of their income on taxable things and invest the rest. A wealthy person only spends a tiny fraction of their income. Therefore, the poorest a person is the higher a percentage of their income is paid with a consumption tax.

Re:Cheaters (1)

fafaforza (248976) | more than 2 years ago | (#39004375)

What do these poor people spend their money on that they'd be paying more in taxes? Food from groceries is exempt from taxes in many areas, as is clothing below a certain amount. Why couldn't other necessities be added to the list in a consumption tax system?

Unfortunately, you're an idiot. (1)

raehl (609729) | more than 2 years ago | (#39004377)

First, the oft-touted "47% of tax units pay no income taxes" statistic is wrong. 47% of tax units may not pay the Federal Income Tax, but any of them with any wage income at all DO pay the Federal Payroll Tax of 15.3% on every dollar earned up to about $100k. That's a tax on income.

That's a higher tax rate than the very wealthy pay on their investment / dividend / carried interest income.

As a matter of fact, I personally pay a federal tax rate of about 29%, double the tax rate paid by Mitt Romney.

Most people advocating replacing the Federal Income Tax with a "flat" tax are really advocating HUGE tax breaks for the rich, because they're still going to charge anyone who dares to work for a living the new "flat" tax *AND* the 15.3% payroll tax which they're not going to pay.

Even better are those who argue for a 0% capital gains and dividend tax (Newt, Ron Paul), who don't want the wealthy to pay ANY TAXES AT ALL!

Re:Cheaters (3, Informative)

TubeSteak (669689) | more than 2 years ago | (#39003085)

Consumption taxes are not inherently simpler than income taxes. The core reason behind conservatives arguing constantly for a flat consumption tax is that they are tired of progressive taxes and really would prefer taxes to be regressive. It has very little to do with the IRS or your plight.

I had a back and forth, about taxes, in another thread with a /.er whose rebuttal was
"The founding fathers didn't institute a progressive income tax"

The fact is, consumption taxes (and/or tariffs) were enough to support the Federal Government's expenditures for the first ~85 years of its existence.
Now, a universal flat tax is just a massive giveaway to the richest Americans and a massive taking from those least able to afford it.
Not even Hermain Cain's 9-9-9 survived as a universal flat tax. [wsj.com]

Re:Cheaters (1)

roman_mir (125474) | more than 2 years ago | (#39003489)

Consumption taxes are not inherently simpler than income taxes

- I am just going to respond to this, the rest I won't touch with you.

Consumption taxes are not just 'inherently simpler' than income taxes, they are infinitely simpler for the consumers.

What does one have to do to file taxes? At the minimum buy a software package and install it on a computer (so must own and operate a computer) and then go over forms, but this means having to pull out various papers collected over the year (or more than one year), receipts, statements, payslips, etc.

Otherwise all of that information must be collected and brought to a tax accountant.

Tax accountants must be hired, workplace must be supplied to them.

When it comes to more complex stuff - tax lawyers must be hired. Sometimes IRS comes in and audits you.

Then there are corporations. GE filed 57,000 pages as its tax return [weeklystandard.com] and managed to pay no taxes to US government as I understand, good for them.

====

Compare all of this to consumption taxes: you come to a store, the tax is either already in the price or it is applied to the total on the cash register. You don't have to keep the receipt even if you don't care about returning the item.

It's the store that has to take a percentage of its sales and send the check (or electronic payment) to the government.

Don't need IRS, why? Because it's not store's money, it's client's money, the law is simple and can be understood by a person as opposed to income tax/payroll tax/corporate tax/death tax/capital gains tax/other type of so called "income" tax law.

I show why income taxes are illegal and illegally collected here [slashdot.org] , and part of it the fact that nobody can understand the law and even based on that fact it's illegal, never mind the fact that there is no such concept as 'income', it's all profit tax, and it can only apply to corporations legally.

But saying that there is no difference between how complex income tax is compared to consumption tax is ridiculous.

All the unproductive jobs and resources spent that are used to file income tax, then fight the IRS, and what happens to people who lose this battle (85% of cases).... With consumption tax you pay it and forget about it, nobody is coming to get you, so if you don't get it, shut up.

Re:Cheaters (2)

wrook (134116) | more than 2 years ago | (#39003601)

You are right to say that a flat sales tax is simpler than a progressive income tax (and probably that was what the OP was talking about). I just want to point out that consumption tax can, indeed, be more complex than income tax. If you implement a consumption tax similar to Canada's "Goods and Services Tax", everything is taxed at every stage through the process. It is impossible for the consumer to know what percentage of the price is tax.

Here is an example. A farmer produces wheat and sells it to a distributor. The distributor pays 10% flat tax. The distributor then sells the wheat to a mill. The mill pays 10% tax (including 10% of tax that the distributor paid). The mill sells flour to another distributore. The distributor pays 10% tax (includine 10% of the tax that the mill paid), etc. What often happens in this scenario is that the person selling gets a rebate for the tax that they paid on things that they sold. This is somewhat complicated, but what is very complicated is for the government to track all of this to make sure that nobody is cheating. Basically, the cost of implementing the tax goes up.

Much simpler is a flat income tax (including flat corporate tax). Banks withold 10% of returns on investments. Employers withold 10% of paychecks/bonuses/cost of perks. Businesses pay a flat 10% on profit. It is *very* simple for everyone to understand. If you allow no deductions at all, it is incredibly simple.

The advantage over consumption taxes is that everyone pays the same percentage. With a consumption tax, poor people spend every cent they make (often more, since they are in debt). Rich people don't (they have money in investments). Pretty much the definition of poor and rich. Thus, poor people actually pay a greater percentage of their income on tax than the rich (anti-progressive?)

The downside of a flat income tax is that rich people/corporations who are used to fiddling the system to avoid tax will leave the country, taking jobs with them. Also, the cost of implementing the tax is offloaded primarily to businesses, which they don't like.

I've lived in a country which had both flat income tax and a consumption tax. Even though I was poor at the time, I liked the system better than a progressive tax. The consumption tax was also invisible (integrated into prices). Even though this is pretty much the opposite to what anti-poverty groups advocate, I liked it better. It was really easy for me to calculate my income/outgo. My job was advertised with the after-tax amount and my expenses were all advertised with after tax amounts. It is much, much easier to understand what's going on.

Re:Cheaters (1)

roman_mir (125474) | more than 2 years ago | (#39003749)

If you implement a consumption tax similar to Canada's "Goods and Services Tax", everything is taxed at every stage through the process. It is impossible for the consumer to know what percentage of the price is tax.

- it is a compound tax, but to the consumer every step in the process does not matter, the simplicity of not bothering with collecting all of the papers over the year and then having to FILE a tax form and not really knowing what is going to happen - will you really owe a tax or be paid something back or will you really be audited and then you are on a 'black list' for at least 4 years, and they will go over the last 7-8 years of your tax returns and your spending, receipts, etc. This is a nightmare.

Compared to that, not knowing what the value added tax was at every step of production of a plastic bucket is trivial. You see the final price or the final price + a percentage that is tax, you are done. You don't need to keep the receipts, you don't need to worry that IRS will come after you because you claimed that bucket against your taxes or whatever you did, etc.

It's trivial and insignificant compared to the costs associated with filing income taxes, and especially if IRS comes after you and then you are properly fucked, because the law doesn't exist there to make everybody a law abiding citizen, it exists to ensure that nobody can ever be a 'law abiding citizen', because even the law enforcers themselves don't understand the law (as proven by the fact that only 85% of IRS related court cases have a 'guilty' verdict, so in at least 15% of cases IRS is wrong in its own understanding of the law, whatever it is.)

Lawyers and accountants and IRS agents and cops and courts and judges and unequal application of that broken law and who knows what else - that's what you get with income taxes.

Much simpler is a flat income tax (including flat corporate tax).

- what is INCOME tax? I explain that there is no such thing. [slashdot.org] It's a long post, with SCOTUS decision references, thus I don't copy and paste it here, just link to it.

Banks withold 10% of returns on investments. Employers withold 10% of paychecks/bonuses/cost of perks. Businesses pay a flat 10% on profit. It is *very* simple for everyone to understand. If you allow no deductions at all, it is incredibly simple.

- are there deductions under your plan?

Can a company deduct payroll from its revenue?
Can a person deduct his losses against his investment?

Just that alone increases the total tax from 'flat' 10% to something else altogether and it's immediately open to discussion and banks definitely cannot WITHHOLD any amount based on investment revenue, who said it's the total PROFIT? Total profit is all revenues minus all expenses at least, never mind various special cases that you didn't address and that will immediately put a huge hole in talking about 'simplicity'.

There is no simplicity at all with taxing work.

The advantage over consumption taxes is that everyone pays the same percentage. With a consumption tax, poor people spend every cent they make (often more, since they are in debt). Rich people don't (they have money in investments). Pretty much the definition of poor and rich. Thus, poor people actually pay a greater percentage of their income on tax than the rich (anti-progressive?)

- huge problem with socialists is that they don't understand economics at all.

Any amount of money that is not spent is re-invested, and it is not government, that creates wealth and real jobs as a consequence of trying to make a buck, it's private enterprise.

Society needs as little government as humanly possible because any amount allocated to the government is the amount that is not used to grow the economy and growth of economy is not some esoteric useless concept, it's what allows us to allocate resources to new ideas. Without it we wouldn't have washing machines, cars, airplanes, radio, cell phones, electricity, cheap and safe food, cheap and accessible healthcare, etc.etc. All of the things that government does subtracts from economy, doesn't add to it, and it has the real multiplier effect.

Any amount of money that is taken away from a more productive person (and I do mean that people with more money are more productive than people with less money, because they put their money to work and people with little money only use their cash for consumption and not production), any amount taken away from productive population and then distributed among the unproductive (most likely as bank bailouts and military contracts), this is the money that subtracts from real active investments, it's the loss of opportunity and it allows the unproductive to steal resources from the productive.

Simplifying (and without taking taxes into account):

Person A has 1000,000 dollars of 'income'. He spends 100,000 a year. His savings and investment capital is 900,000.

Person B has 100,000 dollars of 'income'. He spends 70,000 a year. His savings and investment capital is 30,000.

Now, 900,000 is bigger than 30,000, but say both are used as investment capital to grow the economy, never mind what the methods are, that's not part of the point.

If gov't taxes person A with a total compound tax of say 400,000 and taxes person B with a total compound tax of 25,000, then person A can only invest 500,000 and person B can only invest 5,000.

Is the economy better or worse for it? Well, the government will take that money and use monopolistic government power to promote its own causes, whatever they are, and every one of those causes will distort the economy, will eventually lead to the economic crash.

OTOH if the tax was instead on consumption only, then both, person A and B could moderate their consumption to pay more or less taxes, they could modify their behaviour on consumption side, but on production side they would still be untouched and the government couldn't grow based on percentage of their consumption, only on percentage of what they are willing to spend on taxable goods.

The economy always wins when the money that is spent in it is spent in the real market without distortion by the government. There wouldn't be a crash like in the twenties and thirties, seventies and nineties and the last decade wouldn't be a problem and there wouldn't be an incoming USD and bond crash.

Also government should never be allowed to borrow against the future earnings of the citizens, because that's the real tax and it eventually allows gov't to transition to counterfeiting (money printing) and that becomes the final culprit of complete economic destruction.

Re:Cheaters (1)

roman_mir (125474) | more than 2 years ago | (#39003799)

Correction:

... but on production side they would still be untouched and the government couldn't grow based on percentage of their production and work, only on percentage of what they are willing to spend on taxable goods.

Re:Cheaters (2)

Tanktalus (794810) | more than 2 years ago | (#39002797)

You're too subtle for me. Stop beating about the bush and tell us how you really feel!

Re:Cheaters (0)

Anonymous Coward | more than 2 years ago | (#39004155)

you're out of your f-ing mind.

Re:Cheaters (0)

Anonymous Coward | more than 2 years ago | (#39004321)

I have a big problem paying taxes the way they are.

The IRS can go straight to hell. Nowhere else in America are you guilty till proven innocent and due process does not exist.

Not Just the IRS. The media does it all the time to anyone the please.

This is bullshit (1)

Anonymous Coward | more than 2 years ago | (#39002033)

I bet he won't be punished NEARLY as bad as the megaupload guy. Such bullshit.

Re:This is bullshit (0, Troll)

tomhudson (43916) | more than 2 years ago | (#39002179)

Steal a million, go to jail. Steal hundreds of billions ...

Re:This is bullshit (1)

Mitchell314 (1576581) | more than 2 years ago | (#39002553)

you're a conqueror. Steal it all . . .

Re:This is bullshit (1)

shutdown -p now (807394) | more than 2 years ago | (#39002621)

Steal hundreds of billions ...

I object to your terminology here. That's called "tax", not "steal". ~

Re:This is bullshit (1)

tomhudson (43916) | more than 2 years ago | (#39002651)

Oops - I guess I should have made it clear that I was referring to that "other tax" - the wall street bailouts. My bad!

Trickle-down doesn't work, you'd think the government would realize trickle-up doesn't either.

Re:This is bullshit (1)

shutdown -p now (807394) | more than 2 years ago | (#39002859)

Don't worry, I'm not a libertarian; and I got the idea just fine. It was just too tempting to not poke fun at it that way.

Re:This is bullshit (0)

Anonymous Coward | more than 2 years ago | (#39003617)

He's not talking about tax. He's talking about copyright infringement.
I'm pretty sure I've got a couple of hundred billion sitting around
here on my hard drive.

Re:This is bullshit (1)

sco08y (615665) | more than 2 years ago | (#39002479)

I bet he won't be punished NEARLY as bad as the megaupload guy. Such bullshit.

How can you get so angry at something you speculate is going to happen?

But there's no need to bet, it's in the fucking summary. 105 weeks in prison, after a guilty plea. The megaupload guy is fighting it, which means he might get off entirely, or they might slam him, so the two sentences won't be comparable.

Re:This is bullshit (2, Informative)

Anonymous Coward | more than 2 years ago | (#39002539)

105 MONTHS in prison, not weeks. Just a bit shy of 9 years.

Re:This is bullshit (2)

timeOday (582209) | more than 2 years ago | (#39002575)

You know, as much as I would not like to waste 2 years of my life in prison, I think I'd be even more worried about the rest of my life, as a felony convict. In these days of less-than-full employment, it's not like you can just rider over the next horizon and start over. Convicted felons are truly screwed for life employment-wise. They can't even get food stamps.

Re:This is bullshit (1, Flamebait)

Ethanol-fueled (1125189) | more than 2 years ago | (#39002689)

Today I was discussing tickets from red-light cameras with a co-worker, and he said something profound -

" That ticket cost me over 400 bucks, and I didn't even run the light, I turned into it. Over 400 bucks! I fought it and lost. It was three days of work's pay for me - it's really no different than going to jail for three days! "

And then he added:

" so I wrote my councilman, Carl DeMaio, [sdgln.com] and I didn't even get a canned response. What a beady-eyed, weaselly, rat-finked motherfucker. "

NO!!! (-1)

Anonymous Coward | more than 2 years ago | (#39002895)

But Carl DeMaio is a Republican!!! I thought Republicans stood for freedom and they could do no wrong!

Re:This is bullshit (-1)

Anonymous Coward | more than 2 years ago | (#39002569)

You're so full of shit. Use a brain. (Not yours, it apparently doesn't work.)

Re:This is bullshit (-1)

Anonymous Coward | more than 2 years ago | (#39003533)

He didn't steal from Jews, so he won't be crucified like Kim Dotcom and the other Megaupload guys will be.

It really never ceases to amaze me.... (4, Interesting)

mark-t (151149) | more than 2 years ago | (#39002039)

...that the people who do this kind of crap somehow genuinely figure that they won't ever be found out.

Why is it that you so rarely hear about crimes where the feds haven't been able to actually figure out who actually did it?

Re:It really never ceases to amaze me.... (0)

Anonymous Coward | more than 2 years ago | (#39002129)

Ongoing investigations don't make it into court, and crime like this doesn't get much in the way of news coverage otherwise, since the emergency crew rarely get involved.

Unsolved bank robberies, now they get a bit of coverage at the incident, but the arrest is another matter.

They get greedy. (1)

ArchieBunker (132337) | more than 2 years ago | (#39002429)

Say they stopped at $6 million. That is enough to get a new false identity or move to a country without extradition. After watching Top Gear I'd settle on Vietnam. Looks beautiful and friendly and has no diplomatic or extradition treaties.

Re:They get greedy. (3, Insightful)

Anonymous Coward | more than 2 years ago | (#39002695)

After watching Top Gear I'd settle on Vietnam. Looks beautiful and friendly and has no diplomatic or extradition treaties.

Everywhere looks "beautiful and friendly" when you've got a massive production team running around making sure everything goes smoothly (and an editing team for when things don't).

Re:They get greedy. (3, Insightful)

El Torico (732160) | more than 2 years ago | (#39003539)

Everywhere is beautiful and friendly when you're very rich.

Re:They get greedy. (0)

Anonymous Coward | more than 2 years ago | (#39002861)

@ArchieBunker, So you have like 6 million dollars of other people's money, and you decide to be smart and fly off to Vietnam. The idea is you're an American and you have 6 million dollars, and you think Vietnam doesn't have extradition. So you show up with 6 million in cash, diamonds, bearer bonds, or maybe it's in Swiss bank accounts. You have a US passport, or maybe you got one from somewhere else, but they know who you are. They welcome you because you have money, but since the US government wants to talk to you about something they think you might have done, it's not like you can ask them for help, because the first thing they're going to do if they get in the same room with you is ask about the 6 million dollars. The Vietnamese government (or whomever) knows this, or finds out shortly after you arrive, and jacks you for 6M. Now you're wanted for the theft of 6 million dollars, and you have no money, and you're in a country where people from your country, not too long ago, and within living memory of many people who were there at the time, were raping, murdering, pillaging, etc., their country not so long ago. I am not sure that's a good idea. Why not simply not steal in the first place. Afterall, the US government doesn't like people stealing, especially from it... it hates the competition. Besides if you want to steal, the best way it's being shown now is to be a business criminal. So many millionaires and billionaires in the US made their fortunes by robbing people blind using perfectly legal business tricks. Like buying a company, subdividing it into two or more parts, at least one of which holds all the debts and obligations, and one or more others that hold all the assets, then cast loose the debt-ridden portion that then promptly has to file for bankruptcy and goes under taking dozens or hundreds or even thousands of jobs with it, while the executives get million+ dollar golden parachutes, and laugh as everyone else goes down. That's the way to do it. Of course it requires you have no conscience.

Re:It really never ceases to amaze me.... (3, Insightful)

izomiac (815208) | more than 2 years ago | (#39002447)

The best criminals are smart enough to make it look like a crime never occurred, and there are probably a fair number of these (not an extraordinary number, there are lucrative "honest" lines of work for smart people). This guy probably though he could pull that off.

The article isn't too explicit on the details, but it sounds like he used his position and expertise to identify 29 people who were [dumber: weren't] eligible but didn't file [dumber: yet] for substantial tax returns. Then, he used the data he had (e.g. name, social security number, finances, etc.) to file those returns, with the refunds going to accounts under his control. (Smart: setup accounts in the proper recipient's name and state, Dumb: setup the accounts in his own state/name.)

This was an all-or-nothing crime. Either it's never discovered or he's caught. Who knows if he's the first to have tried? And, for those wanting his head, it wasn't a horrible crime. It's stealing, since it's not his money, but the victim is hard to identify (the people not claiming refunds? the government for relying on ignorance/apathy to not refund extra taxes inadvertently paid?). The stiff punishment is likely related to how close he was to getting away with it and how much he almost got (i.e. to make the risk greater than the reward).

Re:It really never ceases to amaze me.... (4, Interesting)

epine (68316) | more than 2 years ago | (#39003397)

This is the perfect crime for an early season of the Sopranos, which featured several episodes where "degenerate" businessmen engaged in acts of crime they couldn't refuse. One involved an executive at an HMO, another involved a sporting gear franchise. Difference is that the screenwriters probably weren't bold enough to make this one up.

And, for those wanting his head, it wasn't a horrible crime. It's stealing, since it's not his money, but the victim is hard to identify ...

David Rose on the Moral Foundations of Economic Behavior [econtalk.org] in which he discusses his new book by that title.

From the very loose transcript (my emph.):

[W]hat is required to live that way, doesn't require twenty hours of schooling. It requires many years of continuous reinforcement in order to build the character to produce the moral conviction behind a belief, but the beliefs themselves are pretty simple. Don't do stuff, don't do negative moral actions. Just don't do them; and just because nobody gets hurt, that doesn't mean you can do it, either. Because it's not about the person who is getting hurt or not hurt; it's about you. If you steal, even though nobody gets hurt, you are still a thief. So don't do it. Period. Don't even consider it. Don't even run it up the flagpole. That's not that complicated. And then secondly, if somebody says to you that you should do something that you know is wrong but it's okay to do it because there's this other good thing over here that you can make happen if you do otherwise, you need to realize that that is the language of a charlatan, that that is inappropriate, that you are being sucked in.

By the time you start rationalizing about the diffuse nature of the victim, moral laxity is already half-way up the flag pole.

David Rose knows your type:

The amount of cheating has never been zero, of course, but it has gone up dramatically in the last 25 years. Moreover, in the past when you asked students why they cheated and they explained why they cheated, they almost never excused the cheating; they never downplayed the moral import of it. They would say it was wrong but they had to do it. Today, though, increasingly--I don't remember the proportion but it's a shockingly high proportion--most of them report cheating at least once; and a shockingly high proportion of those who report cheating at least once say: What's the big deal? In other words, they make an argument that is very consistent with the absence of principled moral restraint. Because their argument is: I cheated; so what? Nobody got hurt. I didn't take anything from anybody. Nobody's worse off. Teacher's not worse off; I'm certainly not worse off; nobody in the class is worse off; what difference did it make? And the answer of course is, at that margin it makes no difference at all. But my point is that it's indicative of a shift in moral beliefs themselves, the way we organize our thoughts, and it's very frightening.

financial crimes often go unreported (5, Informative)

decora (1710862) | more than 2 years ago | (#39002543)

1. a lot of financial institutions would rather not it be public knowledge that they have problems in their security systems, etc. they try to hush things up without getting the cops involved.

2. the cops sometimes will collude with them to hush things up. see 'The Asylum' by Leah McGrath Goodman and NYMEX (yes, NYMEX from Trading Places)

3. at the highest echelon, the notion of what is legal and illegal gets distorted and fooled with, by lobbyists, payed-for intellectuals, and the super rich. so that to date there has been little-to-no prosecution of the people in the CDO, mortgage securities, robo signing, foreclosure fraud, and housing bubble system. experts and authors like Roger Lowenstein spill buckets of ink trying to prove that no crime took place, even though 2 trillion dollars magically disappeared into hedge funds and investment banks offshore accounts in 2008, with the help of the taxpayer.

4. take number 3 and just ... multiply it. well. did you know, for example, that the guy who ran Nymex was, directly before he ran Nymex, the head government regulator of Nymex? And that he let Nymex do stuff that it shouldn't have been doing, and then they hired him out of his government job and gave him a huge raise? there are thousands of cases like that that never receive media attention.

in other words, people DO get away with that sort of thing, all the time.
and the best way to get away with it is to have something like 'CEO' or 'Board Chairman' on your resume.

Re:financial crimes often go unreported (2, Insightful)

Anonymous Coward | more than 2 years ago | (#39003779)

FWIW, being a lowly anonymous coward: I worked for large multinational bank, and low-level petty thieves in the system (trying to cash checks under stolen identities, steal money orders, etc.) are *always* dismissed without police prosecution. Furthermore, this is widely known amongst employees, some of whom attempt to take advantage of the PR-shy policy. But there are massive amounts of checks and balances between multiple departments and heavy security to try to guard against loss as much as possible, making it very difficult for a lone perpetrator to get away with pocketing much. On the other hand, nepotism and cronyism run rampant in the banking industry, so if you have three or four collaborators covering up each other's thefts working from different departments and floors, that's when the take gets juicy.

Re:It really never ceases to amaze me.... (2)

Tharsman (1364603) | more than 2 years ago | (#39002693)

It's naive to think that having most prosecutions convicted means most occurrences even get prosecuted.

Most crimes of this type never get caught. Heck, no one even finds out they happened in the first place.

Re:It really never ceases to amaze me.... (3, Insightful)

rachit (163465) | more than 2 years ago | (#39002701)

You know, there is never just one cockroach...

Perhaps because they haven't been caught? (1)

BenJCarter (902199) | more than 2 years ago | (#39002761)

I think it's cool that we actually caught one!

Re:It really never ceases to amaze me.... (0)

Anonymous Coward | more than 2 years ago | (#39002831)

Because if you're really that good, they don't even know it happened.

Re:It really never ceases to amaze me.... (1)

kubernet3s (1954672) | more than 2 years ago | (#39003477)

You kind of answered your own question, hoss. It's not like murder, where someone doesn't show up to work and so police KNOW a crime has been committed: financial crimes are successful when the "victim" institution simply doesn't know the difference. It's especially the case where the amount being stolen is large on the scale of the individual, but small on the scale of the transaction/company ledger (i.e. an "office space" scam), which makes it easier for the ledger to be doctored, or at least for transactions to be deliberately misrepresented.

Re:It really never ceases to amaze me.... (1)

thatskinnyguy (1129515) | more than 2 years ago | (#39003507)

DBCooper. Nuff said. *micdrop*

Re:It really never ceases to amaze me.... (0)

Anonymous Coward | more than 2 years ago | (#39004029)

May be there are a lot of people who've pulled this off... we only get to know the ones who've been caught..

Re:It really never ceases to amaze me.... (0)

Anonymous Coward | more than 2 years ago | (#39004399)

I was thinking the same thing. Seriously, you successfully pull off something like this, you move to another country with no extradition to the US, ASAP.

Just another crime... (-1, Offtopic)

orphiuchus (1146483) | more than 2 years ago | (#39002041)

...who's punishment is more severe than killing Michael Jackson.

Re:Just another crime... (1, Flamebait)

uncanny (954868) | more than 2 years ago | (#39002201)

and the problem is?

Re:Just another crime... (0)

Anonymous Coward | more than 2 years ago | (#39002341)

Michael Jackson committed suicide.

Re:Just another crime... (0)

Anonymous Coward | more than 2 years ago | (#39003075)

The Dr. Didn't murder him....It was manslaughter.

Dumb plan (3, Informative)

tukang (1209392) | more than 2 years ago | (#39002043)

According to the DOJ, Richardson admitted that the tax returns were prepared without the authorization of the 58 taxpayers listed on the tax returns. All of the returns directed that the IRS pay the money to one of Richardson's bank accounts.

I imagine a red flag was automatically triggered by the 58 returns going to one bank account. As a side note, I know people who write code for the Federal government that checks for irregularities like this and they do that for a living 40 hours a week, so if you're going to try to scam the IRS you have to be at least a little clever.

Re:Dumb plan (1, Informative)

Gr33nJ3ll0 (1367543) | more than 2 years ago | (#39002071)

I think you need to read that a little closer. It says bank accountS as in plural. Surprisingly a guy who was attempting to defraud the IRS from the inside was smart enough to open more than one account.

Re:Dumb plan (1)

tukang (1209392) | more than 2 years ago | (#39002143)

It also says "one of", which they could have just left out if they meant that the money went to multiple accounts. Regardless, triggering a red flag on 58 returns going to one account owner (as opposed to one account) is just as trivial.

Re:Dumb plan (2)

Sir_Sri (199544) | more than 2 years ago | (#39002465)

The red flag might have been a single employee doing a particularly large (or small) number of returns or returns of the wrong general value, in a 2 day period. Granted at 59 returns it's 130k per return, but that would mean this guy happened upon 59 filings from the top 1% of wage earners (the top 1% in the US now is around 300k/year in income so for 2005 tax returns paying out 130k should be relatively rare, unless you work on those, and if you work on the ones with big money I'd expect you to get more scrutiny).

The article suggests but doesn't explicitly say he was caught because the SSN's he used were for single people, not married people and he was filing jointly or problems like that, so the automated tools caught some of it.

It also looks like they caught this on the 8th return, not the 59th. They only paid out on 7 claims, before they realized something was up.

Re:Dumb plan (1)

w_dragon (1802458) | more than 2 years ago | (#39004055)

Maybe this doesn't exist in the US, but here we have places that advertise 'we do your taxes, you get your refund right away'. I assume that they do your taxes, give you the cash minus a fee, and set your refund to be deposited in their account. If that type of business exists then it wouldn't throw up any flags to have a bunch of returns done at once going to the same account.

I wonder if there's a hole there (3, Insightful)

v1 (525388) | more than 2 years ago | (#39002055)

Richardson used his inside knowledge of IRS operations to commit his crime,

So I wonder what aspect of "insider knowledge" he used? Logins and passwords? back doors? social engineering? test accounts? phone numbers to helpful clerks that don't think about what they're being asked to do? secret URLs?

Is there a back door that anyone with similar "insider knowledge" can use, that's not a hole that's closable with say a simple password change? (has the hole been closed?)

Re:I wonder if there's a hole there (4, Funny)

treeves (963993) | more than 2 years ago | (#39002117)

According to your sig, you also work for the Federal government, so you'd better be careful asking such questions!

Re:I wonder if there's a hole there (2)

treeves (963993) | more than 2 years ago | (#39002513)

Modded Interesting? Thanks for the karma, but I don't really need it, and it was a *joke* (all good jokes have some element of truth of course).

Re:I wonder if there's a hole there (1)

twistofsin (718250) | more than 2 years ago | (#39002577)

Richardson used his inside knowledge of IRS operations to commit his crime,

So I wonder what aspect of "insider knowledge" he used? Logins and passwords? back doors? social engineering? test accounts? phone numbers to helpful clerks that don't think about what they're being asked to do? secret URLs?

Is there a back door that anyone with similar "insider knowledge" can use, that's not a hole that's closable with say a simple password change? (has the hole been closed?)

I suspect that his "insider knowledge" was about people who were due to receive a lot of money back but had not yet filed.

Re:I wonder if there's a hole there (1)

GringoGoiano (176551) | more than 2 years ago | (#39003073)

IRS uses the SenSage log data storage & analysis product: http://sensage.com/content/customers

Having used this product I'm sure the IRS will have all they need to track his electronic footprints outside the normal bounds and scope of his work. Unfortunately we'll never know.

Is This the Opportunity that the IRS... (0)

Anonymous Coward | more than 2 years ago | (#39002149)

has been waiting for? What is the likelihood that these 58 taxpayers, and others, will be audited... for their own good?

Re:Is This the Opportunity that the IRS... (1)

mark-t (151149) | more than 2 years ago | (#39002243)

How is that especially an opportunity? Do you have any idea how many people actually get audited in a year? 58 more is completely inconsequential.

IRS (1, Offtopic)

roman_mir (125474) | more than 2 years ago | (#39002181)

What this agent did was actually a minor correction of the fraud and crime that IRS is involved with on the daily basis. [slashdot.org]

Re:IRS (2)

roman_mir (125474) | more than 2 years ago | (#39002203)

A little typo: I don't mean to imply that identity theft is a 'correction' of the IRS fraud, only that what IRS does on daily basis is fraud [slashdot.org] and this guy is just a small part of that entire fraudster operation.

Re:IRS (0)

Anonymous Coward | more than 2 years ago | (#39004245)

Quit using sock puppets to mod yourself up.

dept of redundancy dept (0)

Anonymous Coward | more than 2 years ago | (#39002237)

your nonsense doesn't magically turn into actual fact just because you keep linking to yourself saying it. you should either become a better troll or find a better hobby.

Eight million dollars?!?!? (5, Funny)

sootman (158191) | more than 2 years ago | (#39002221)

Wow. That's like... four illegal downloads!

News for nerds. (1)

Beelzebud (1361137) | more than 2 years ago | (#39002281)

Glad to see /. sticking to their slogan of "news for nerds".

Re:News for nerds. (1)

Sir_Sri (199544) | more than 2 years ago | (#39002475)

The thrust of the article is actually about the privacy concerns the IRS has, and this is the sort of thing that can go wrong. So it is topical, if you look past the summary.

Re:News for nerds. (1)

sandytaru (1158959) | more than 2 years ago | (#39002669)

Nerds are by their very natures polymaths. We like to stick our curious little noses in a lot of things people wouldn't expect us to be interested in.

$80,000 a month! (0)

Anonymous Coward | more than 2 years ago | (#39002329)

That $80,000 a month! Who says crime doesn't pay?

Re:$80,000 a month! (1)

jaymzter (452402) | more than 2 years ago | (#39003269)

Thomas Richardson was quoted as saying:

"I must have put a decimal point in the wrong place or something. Shit. I always do that. I always mess up some mundane detail."

What is the tax rate on ill-gotten gains? (2)

NotQuiteReal (608241) | more than 2 years ago | (#39002403)

Hypothetical, say you are a criminal, but want to avoid the fate of Al Capone and get busted for not paying your taxes. Can you use the capital gains rate if you have some sort of fraud that takes more than a year for the payoff?

The best would be some sort of crime that pays off after the statute of limitations, and you only have to pay the lower capital gains rate. Win Win Win!

Re:What is the tax rate on ill-gotten gains? (0)

Anonymous Coward | more than 2 years ago | (#39002633)

Al Capone busted on IRS evasion has got to be the best PR stunt in history.

Re:What is the tax rate on ill-gotten gains? (1)

hawks5999 (588198) | more than 2 years ago | (#39002667)

Launder the money through a car wash. If you don't know how to do that... Better Call Saul.

If the IRS accepts your taxes on crime... (0)

Anonymous Coward | more than 2 years ago | (#39002991)

...isn't that implicit approval that what you did was legal?

Re:If the IRS accepts your taxes on crime... (4, Interesting)

subreality (157447) | more than 2 years ago | (#39003271)

...isn't that implicit approval that what you did was legal?

No, that's implicit approval that you didn't also commit tax evasion.

The rulings are pretty self-consistent. You can even deduct the expenses for your illegal business:

"While embezzlers, thieves, and the like are forced to report their ill-gotten gains as income for tax purposes, they may also take deductions for costs relating to criminal activity. For example, in Commissioner v. Tellier, a taxpayer was found guilty of engaging in business activities that violated the Securities Act of 1933.[7] The taxpayer subsequently tried to deduct from his gross income the legal fees he spent while defending himself.[8] The Supreme Court held that the taxpayer was allowed to deduct the legal fees from his gross income because they meet the requirements of 162(a).[9], which allows the taxpayer to deduct all the “ordinary and necessary expenses paid or incurred during the taxable year in carrying on a trade or business.”[10] The Court reasoned (and the Internal Revenue Service did not contest the point) that it was ordinary and necessary for a person engaged in a business to expect to have legal fees associated with that business, even though such things may only happen once in a lifetime.[11] Therefore, the taxpayer in Tellier was allowed to deduct his legal fees from his gross income, even though he incurred the fees because of his crime. The Tellier court reiterated that the purpose of the tax code was to tax net income, not punish unlawful behavior.[12] The Court suggested that if this was not the case, Congress would change the tax code to include special tax rules for illegal conduct.[13]" -- https://en.wikipedia.org/wiki/Taxation_of_illegal_income_in_the_United_States [wikipedia.org]

Re:If the IRS accepts your taxes on crime... (1)

base3 (539820) | more than 2 years ago | (#39004069)

Nuggets of information like this are why i still like to read Slashdot. Thanks!

What a smarty (1)

GillyGuthrie (1515855) | more than 2 years ago | (#39002425)

TFA says all 58 returns directed money be deposited into one of the guy's bank accounts. Derp

105 months = 8.75 years so $914,285/year (1)

seifried (12921) | more than 2 years ago | (#39002753)

Not bad, it would seem white collar crime really does pay.

Re:105 months = 8.75 years so $914,285/year (0)

Anonymous Coward | more than 2 years ago | (#39002897)

Yeah! that's $2500 a DAY, vastly more than I make! would I go to jail for 13 years, for $8 million? I don't know, maybe!

Re:105 months = 8.75 years so $914,285/year (0)

Anonymous Coward | more than 2 years ago | (#39004085)

I've been sitting in a cubicle 'jail' for 8 years and only have made $400,000, at least 25% of which went to taxes.

And I haven't even received a conjugal visit...

If he hid the money well, or wasn't fined $9 million, there are good places of the world to go to to spend it.

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