Stealing your way to prosperity one bogus tax refund at a time

After learning that an Orange Park, Florida, man is accused of getting $2.7 million in bogus tax refunds, you might get the impression that stealing from the Internal Revenue Service is like taking candy from a baby. Actually, many of the identities that Bryan A. Copeland allegedly used to file fake tax returns did belong to children.

Authorities said Copeland stole the Social Security numbers of numerous individuals who regularly had contact with the Florida Department of Children and Families (DCF), or the Department of Juvenile Justice in Florida.
 
"For the people we serve, it's very important that their privacy and confidentiality be protected. We are very concerned about these allegations and we are certainly going to review it,” John Harrell, spokesman for the DCF, told reporters. Harrell added that the agency hadn't been aware of any security breach.
 
Copeland, 31, and six co-conspirators used counterfeit W-2s to file 880 false tax returns from 2006 to 2009, according to a court declaration. If the charges prove to be true, Copeland and the others rifled through agency databases to get the names and Social Security numbers of individuals, including children. They filed tax returns that generated refunds, and had the refunds mailed to addresses in Jacksonville, Florida, or directly deposited into bank accounts.
 
What tipped off the authorities?
 
A postal carrier notified the IRS numerous mailings from the tax agency were going to the same address under different names. It turns out 225 refunds totaling approximately $239,000 went to one address at the Blanding Boulevard Apartments in Jacksonville. When agents spoke to the woman who lived at the address, she said the mailings were fraudulent refunds that she gave to Copeland.
 
Another $2.4 million in bogus refunds were directly deposited into bank accounts under six different names. The accountholders all told agents that Copeland told them to open the accounts, and that he promised to pay them for their efforts. Some of the money has not yet been traced.
 
Agents interviewed 25 of the taxpayers whose identities were used. None of them knew why their information was used. Many names and Social Security numbers for children were used on returns for taxpayers they were not related to.
 
Copeland, who was on probation for a robbery committed in the late 1990s, was tailed by federal agents. The agents reported that he was driving erratically, and, at one point, swerved to the right shoulder of the road, and tossed two backpacks out of his vehicle off the Dames Point Bridge in Jacksonville. The backpacks landed on the bridge and were retrieved by agents. The bags contained four laptops, information about the co-conspirators, tax information, and blank tax forms.
 
Copeland was stopped on the other side of the bridge and was found to have similar items in the vehicle, as well as a loaded handgun. He surrendered without incident and was arrested for felony fleeing. He was released on $15,000 bail. He has not yet been charged with fraud. His trial begins in October.
 
The court declaration detailing the charges was filed in the U.S. Attorney’s Office in a civil forfeiture case by Secret Service Agent Anthony Preissig. The declaration stated that 28 of the refunds (totaling $45,000) were mailed to the address of Earnest Copeland, Bryan Copeland’s father.
 
The civil forfeiture case was filed to seize the remaining proceeds of the sale of a 2007 Mercedes-Benz S550 purchased for the senior Copeland. Earnest Copeland – who lives on a $1,200 a month Veterans Administration disability check – told the agents he had saved for years to purchase the Mercedes. The only reason he sold the car, he told agents, was to pay for his son’s legal bills.
 
Preissig reported that $38,000 of the money from the sale was gone, possibly used to pay for the expenses related to caring for Earnest Copeland’s 17 pit bulls. Also seized was a pickup truck Bryan Copeland gave his father to replace the Mercedes, and 24 cars valued at $197,000, from Bryan Copeland’s wife’s car lot on Blanding Boulevard in Jacksonville.
 
Related articles:

You may like these other stories...

As mentioned in today’s “Bramwell’s Lunch Beat” via an article from the USA Today, a new report from the Treasury Inspector General for Tax Administration (TIGTA) found that the IRS doled out $2.8...
London Stock Exchange switches auditing to EYThe London Stock Exchange will drop PwC as its auditor and replace it with EY after completion of the audit for the year ending March 2014, Harriet Agnew of the Financial Times...
With tax season in the past, it's time to think about the tax implications of decisions your clients may be making about their homes in 2014. The rules are complicated and because of the huge amounts involved, the...

Upcoming CPE Webinars

Apr 24
In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.
Apr 30
During the second session of a four-part series on Individual Leadership, the focus will be on time management- a critical success factor for effective leadership. Each person has 24 hours of time to spend each day; the key is making wise investments and knowing what investments yield the greatest return.
May 1
This material focuses on the principles of accounting for non-profit organizations’ expenses. It will include discussions of functional expense categories, accounting for functional expenses and allocations of joint costs.