Published on:

Conviction for defrauding the IRS using the identifications of Florida inmates upheld

Appellants in the Pierre opinion appealed their federal criminal convictions and sentences for conspiracy to defraud the Internal Revenue Service, conspiracy to traffic in unauthorized access devises, aggravated identity theft and other substantive counts of identity theft following a jury trial.   The scheme in this case involved filing fraudulent income tax returns. The Defendants filed tax returns in the names of Florida prison inmates. The tax refunds were paid to the TaxProfessors’ debit cards that were used at automatic teller machines to obtain cash.

The scheme unraveled after an officer spotted a Cadillac with dark tinted windows and could not see inside the vehicle. He also noticed a temporary tag on the vehicle that was registered to the Defendant whose family owned a body shop that authorities suspected fraudulently issued temporary vehicle tags. The officer made a traffic stop because the he believed the tinting on the windows was below the standards permitted by Florida law.   After receiving consent to search the inside of the car the officer found prepaid debit cards issued by a business that was called TaxProfessor. The investigation into the debit cards led to a search warrant for the home of a defendant who was connected to TaxProfessor.   The Defendants also approached an employee of the Florida Department of Children and Family Services as a child protective investigator who had access to personal identifying information through a state database. The Defendant paid the DCF employee for a printout from the website which contained a list of inmates and SSN’s for 25 names on the list. Tax returns were filed using the inmates’ information and the tax refunds were loaded onto these debit cards for TaxProfessors accounts.

In this appeal the defendants challenged the seizure of the TaxProffessors debit cards as a violation of the Fourth Amendment, arguing that the stop was illegal because the proffered reason for the stop, the tinted windows, was a mere pretext to the stop rendering the ensuing search illegal. The Defendants also argued the search of the car exceeded the scope of their consent. Because the district court credited the testimony the officer who said he believed the window tinting was illegal, the court denied the challenge.   The defendants also challenged the search of the home on the basis of materially false information concerning the IP address from which the returns were filed. The appeals court found the information in the warrant affidavit was not false.

The Defendant also claimed the evidence was not sufficient to support convictions for conspiracy to defraud. The appellate court found the government presented ample evidence the defendants paid to obtain SSN’s for Florida inmates and that the numbers were necessary for filing tax returns. Evidence also connected the defendants to office space for a sham business. Evidence for another defendant consisted of videos showing the defendant using the debit cards to withdraw money. Evidence was also sufficient to support convictions for conspiracy to use unauthorized access devices to defraud and aggravated identity theft.

Finally the court upheld a vulnerable victim sentencing guideline enhancement. The court found the defendants specifically targeted inmates based on their perceived vulnerability to the federal criminal tax fraud offense. It concluded that inmates are more vulnerable to this type of activity because they usually do not file income tax returns during periods of incarceration and they are less likely to discover that their identities have been stolen.