Eight people, seven of whom are Southern California residents, stand accused of being leaders of a fraud scheme and have been indicted by a grand jury on allegations that more than 2,000 identities were stolen for the purpose of filing bogus tax refund claims. Twenty-three more people were also taken into custody in connection with the incident.
The government says that the supposed ring leaders recruited students from countries such as Kazakhstan, Russia and Turkmenistan to establish addresses and bank accounts in Southern California in order for the leaders to commit tax fraud. Many of the students who are said to have been recruited to participate in the plan were living in the U.S. on temporary or student visas. The government is attempting to extradite 21 of the lower-level participants named in the indictments who have returned to their home countries.
The scheme targeted the IRS, which wound up paying out more than $20 million for four separate scams, including payments issued to dead people. Half a million dollars was allegedly withdrawn from bank accounts with high balances and low activity at Wells Fargo Bank. A Wells Fargo Bank employee from Glendale is accused of using her position at the bank to perpetuate another scheme involving opening bank accounts as fronts for money laundering.
Investigators believe that there are more suspects involved in the schemes who have yet to be caught. Those who were already indicted face charges of conspiracy, fraud, money laundering and aggravated identity theft, among others. Investigators say that students were only given small cash payments for their roles while the leaders kept the proceeds. A criminal defense attorney could potentially make an offer to strike a plea deal for the lower-level participants in the scheme in exchange for information on the accused ring leaders.
Source: Los Angeles Daily News, “Feds break up alleged Southern California fraud ring“, Kelly Goff, September 26, 2013