Until federal agents received a tip from a tiny credit union in Western Pennsylvania, the Internal Revenue Service was apparently unaware of what federal prosecutors are calling a "massive" fraudulent tax refund scheme that went on for years.
The five men indicted on fraud charges in the case probably believed they were safe using fake identities to open accounts at Widget Financial Credit Union in Erie, Pennsylvania. But a sharp-eyed Widget employee noticed that the credit union was receiving multiple out-of-state account applications using similar personal information, and mentioned the suspicious activity to a supervisor.
According to Credit Union Journal, that tip led to a phone call with the FBI, and the discovery of a multi-yearlong tax fraud scam involving thousands of fake tax returns filed with the stolen personal financial information of people from all over the country.
Federal officials estimate that the five men named in an indictment unsealed yesterday received some $10 million in fraudulent refunds, and had filed claims for even more, totaling up to $21 million. The indictment claims the scheme had been in place for years, from December 2005 through March of this year.