Corrections1 Staff
About 50 inmates at the Stock Island Detention Center near Key West in Florida brought in close to $100,000 in profits by filing for fake refunds with the IRS before their scam was uncovered, the Miami Herald is reporting.
In total, the inmates filed for about $1 in false refunds.
“I was shocked that inmates could steal from the IRS that easily and that blatantly and not be prosecuted. Even when the case was handed to them on a platter,’' Rick Roth, a retired Monroe County Sheriff, told the Herald.
The evidence includes a taped phone conversation at the jail involving one of the alleged ringleaders, Shawn Clarke, who, according to a former investigator on the case, said: “I’m through with the street crime. I’m strictly white collar from now on. I love the IRS.’'
Here’s how the scam worked: Inmates, their friends and family members filed 1040EZ forms along with the one-page 4852 form - a substitute for the W-2 when an employer doesn’t provide one. They used the names of phony or defunct businesses and fabricated tax withholding and income figures, which they often claimed to have earned at a time when they were incarcerated. Many went through unverified.
Law enforcement officials learned of the scam after a ‘how-to’ note was reportedly found in an inmate’s cell. Soon after, Key West police reportedly received a call from a bank when a relative of an inmate tried to cash a $5 thousand refund check using the power of attorney.
The FBI and other agencies were called in to investigate and it was discovered that a number of the fraudulent refund checks had been sent directly to the jail; the money was either directly deposited into the inmate’s ‘canteen’ account which was then used to buy items in jail or signed over to relatives.
The investigation led to two alleged ringleaders, Clarke and Danilo Suarez, each of whom had their own followers, some inside the jail, others not.
Stock Island Detention Center carries common tax documents, but not form 4852. The inmates got them straight from the IRS. One even wrote to the agency that he was upset he had not received the multiple 1040EZ and 4852 forms requested three weeks earlier. The letter said: “Our group would greatly appreciate your help in this matter so we can file accordingly.’'
While the IRS did not comment specifically about Stock Island, it did issue a statement saying it “takes refund fraud seriously and has programs to combat it.’'