Prison Inmates Scam $12 Million From IRS - NBC 6 South Florida

Prison Inmates Scam $12 Million From IRS

The state has assigned an agent specifically to prison inmate tax fraud cases after millions are sent to those behind bars



    Florida prison inmates are the very best in the entire country when it comes to getting tax refunds despite being behind bars. 

    Altogether, enterprising inmates have convinced the IRS to send them a whopping $12 million using creative tax accounting.

    "That's crazy. Ridiculous.  How did they have access, though? That's what my question is," asked taxpayer Alina Barrios, shaking her head at what's happening just down the street from her Victoria and Associates career placement office. Inmates at this work release center would get high mark for enterprise: they were able to send the IRS tax returns and actually receive tax refunds.

    Some are doing hard time, yet have been still been able to scam the government into sending them money back. 

    One inmate, Danilo Suarez, was brilliant at generating refunds. He gathered social security numbers from other inmates then from behind bars at the Monroe county jail, recruited his brother Gilbert and other family members to file a host of returns -- 15 of them, and one even in his own name.

    “What he did was file false tax returns, and he claimed certain money was withheld and they were entitled to a refund," said tax attorney Josh Goldglatz.

    The refund money came pouring in to family address: $4,982, then $4,972, and eventually a total of $52,000 for Suarez. The checks cashed.

    How difficult was this?

    “Well it really wasn’t that difficult," said Goldglatz. “Once he was able to recruit the other inmates and get the social security numbers alls he had to do was to file it with the IRS and use different address so it wouldn't raise a red flag."

    Goldglatz says the Suarez family refund plan unraveled when they forged a legal document and put the notary stamp on upside down -- a simple mistake.

    Twenty fake returns have come from the Opa Locka Work release center, and another 27 from a North Miami facility. Seventy-five were issued from the Broward Corrections Institution, 115 from Florida Dade Correctional Institution.

    The IRS says it takes prisoner tax refund fraud seriously and has programs to aggressively combat the problem, saying they stop the vast majority of incorrect refunds before they go to inmates. However, its clear more needs to be done.

    The state told us officials are working with the IRS to improve its systems to stop these refunds, and has even assigned an agent just to such cases. Believe it or not, some inmates can legally file a return, and that makes it harder to catch those cheating.