By Kenneth J. Hines
As special agent in charge of the Internal Revenue Service – Criminal Investigation (IRS-CI) for the Pacific Northwest, my responsibilities are to supervise investigations relating to criminal tax violations and other related financial crimes that are committed within our communities. My goal is to reach out to you in early 2009 to help you avoid being victimized by common financial fraud schemes. Throughout my career I have spoken with individuals involved in criminal tax and financial fraud schemes, and I can assure you that the resulting emotional and financial pain goes beyond description and is downright devastating to its victims.
Some of these schemes can literally cost you your life savings. Others can result in your prosecution and imprisonment if you knowingly participate in them. Unfortunately, in recent years we have had to help prosecute numerous residents throughout Washington for tax fraud, willfully failing to file tax returns, investment fraud related crimes, healthcare fraud related crimes, mortgage fraud related crimes, laundering illegal drug money, and structuring currency transactions, etc. My goal here is to keep you and your loved ones from such legal and financial trouble.
• Tax Scams – fraudsters will try to convince you that there is no legal requirement to file a federal income tax return or to pay federal income taxes. This is entirely untrue. The federal courts have upheld the validity of the federal income tax laws for decades. Approximately 1,000 people a year are prosecuted in this country for evading their income taxes, willfully failing to file tax returns, filing false tax returns in order to obtain inflated tax refunds and other such tax crimes. Most tax return preparers are extremely honest; however, there are a fair number of tax return preparers who are prosecuted each year for preparing false tax returns for their clients. In addition to jail time, tax cheats also have to pay the back taxes, along with interest and penalties.
• Investment fraud – getting involved in an investment fraud scam, such as a Ponzi scheme, can lead to financial ruin. If someone says that they can help you earn large rates of return on your investment, such as 2-4 percent a month, get a second opinion from a legal, tax, or investment professional. All too frequently, such claims are based solely on trickery and deceit. These fraudsters may simply pay “interest” to you from other victims’ invested money and then provide you with phony quarterly financial statements which they prepared. What these fraudsters really want is to enjoy a lavish lifestyle with your money.
• Money laundering schemes – money laundering is the conversion of illegal money into funds or assets that appear to have come from legitimate or clean sources. Dirty money must be “laundered” in order for the criminal to use it. Sources of dirty money include illegal drug sales, investment fraud, embezzlement, mortgage fraud, healthcare fraud, and dozens of other illegal activities. Don’t let anyone talk you into laundering money for them. It’s a crime and the criminal penalties can be severe – up to 20 years in prison.
• Mortgage fraud – In general, mortgage fraud involves lies made to a lender in order for a loan to be made that the lender would not otherwise approve. Mortgage fraud can be committed by home buyers, appraisers, real estate agents, loan officers, account executives employed by the lenders and others. Real estate transactions require legal documents which are usually signed under penalties of perjury. Don’t jeopardize your good name, your credit or your freedom by being dishonest in a real estate transaction.
• Conclusion – life is to be enjoyed to the fullest extent possible. Don’t let that enjoyment be lost by either committing fraud or by being defrauded by others.
• Kenneth J. Hines, who works in Seattle, has been the IRS Special Agent in Charge of Washington, Oregon, Alaska, Hawaii, Guam and Saipan since 2007. He has satellite offices in Bellevue, Everett, Tacoma, Spokane and Vancouver, Washington, all staffed with criminal investigators. Learn more about IRS – CI at www.irs.gov.
