Eight Defendants Sentenced in $24 Million Stolen Identity Refund Fraud Ring
Nine Thousand Identities Stolen from the U.S. Army, Various Alabama State Agencies, a Georgia Call Center, and a Columbus, Georgia Company
Montgomery, Ala. – Eight residents of Alabama and Georgia were sentenced today for their roles in a $24 million Stolen Identity Refund Fraud (SIRF) conspiracy, announced U.S. Attorney George L. Beck Jr. for the Middle District of Alabama, and Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
U.S. District Court Judge Kristi K. DuBose imposed the following sentences on each defendant:
- Tracy Mitchell, of Phenix City, Alabama, was sentenced to serve 159 months in prison;
- Talarius Paige, of Phenix City, Alabama, was sentenced to serve 60 months in prison;
- Mequetta Snell-Quick, of Columbus, Georgia, was sentenced to serve 24 months plus one day in prison;
- Latasha Mitchell, of Phenix City, Alabama, was sentenced to serve 36 months in prison;
- Dameisha Mitchell, of Phenix City, Alabama, was sentenced to serve 65 months in prison;
- Sharonda Johnson, of Phenix City, Alabama, was sentenced to serve 24 months in prison;
- Patrice Taylor, of Midland, Georgia, was sentenced to serve 12 months plus one day in prison;
- Cynthia Johnson, of Phenix City, Alabama, was sentenced to two years of probation.
Restitution amounts will be determined after additional testimony and evidence is presented.
According to court documents and sentencing proceedings, between January 2011 and December 2013, Keisha Lanier and Tracy Mitchell led this large-scale identity theft ring in which they and their co-defendants filed over 9,000 false tax returns that claimed in excess of $24 million in fraudulent claims. The IRS paid out close to $10 million in fraudulent refunds. The defendants obtained stolen identities from various sources to be used in filing false returns, including from the U.S. Army, several Alabama State agencies, a Georgia call center, and employee records from a Georgia company. Tracy Mitchell worked at the hospital at Fort Benning, Georgia. As a hospital employee, Mitchell had access to the identification data of military personnel, including soldiers who were deployed to Afghanistan. Tracy Mitchell stole personal information of soldiers and used them to file false tax returns.
Tamika Floyd, a defendant in a related case, stole personal information from two Alabama state agencies and provided those names to Keisha Lanier of Seale, Alabama. Lanier provided those names to Tracy Mitchell, Latasha Mitchell, Talarius Paige, and others for use in filing false tax returns. Keisha Lanier also obtained stolen identities from the Alabama Department of Corrections. Talarius Paige and Patrice Taylor worked in a call center for a Columbus, Georgia payment-processing company and stole identities. Paige, in turn, used those identities to file false tax returns and filed some of the returns from Tracy Mitchell’s residence. Tracy and Latasha Mitchell also obtained employee files from a Columbus, Georgia company.
In order to file tax returns, the defendants obtained several Electronic Filing Numbers (“EFIN”) in the names of sham tax businesses. On behalf of those sham tax businesses, the defendants applied for bank products from various financial institutions, which mailed blank check stock to the defendants’ homes. The defendants directed anticipated tax refunds to prepaid debit cards, to U.S. Treasury Checks, and to financial institutions which in turn issued the refunds via checks or prepaid debit cards. When the refunds were sent through the financial institutions, the defendants simply printed out the refund checks from the check stock sent to their homes.
After a period of time, the financial institutions stopped allowing the defendants to print out the tax refund checks. In order to continue the operation, Tracy Mitchell and her family recruited postal employees into the scheme. The corrupt postal employees provided addresses on their routes to have the checks mailed and then obtained those checks from the mail for a fee.
Not only did the case involve a web of stolen names and sham tax businesses, the case involved a sophisticated money laundering operation. Close to $10 million in fraudulent tax refund checks were cashed at several businesses located in Alabama, Georgia, and Kentucky. To orchestrate and coordinate this massive check cashing scheme, the defendants communicated with text messages and kept detailed records. For instance, Sharondra Johnson worked at the Walmart money center in Columbus, Georgia, and as part of her employment, she cashed checks for customers of the money center. Dameisha Mitchell approached Sharondra Johnson about cashing tax refund checks issued in the names of other individuals. Sharondra Johnson agreed to cash the checks and communicated with Dameisha and Tracy Mitchell via text message. In an attempt to conceal the crime from Walmart, the defendants employed multiple individuals to bring the fraudulent checks to Johnson to have her cash them.
At sentencing, prosecutors read impact statements from several victims whose identities were stolen and from companies and governmental agencies where the identity theft breaches occurred. As one agency representative noted, the identity theft was not only devastating as to cost, but it had a chilling effect on their ability to serve the residents of this state. A mother of a young Army soldier who was a victim described the consequences of the fraud on her, her son, and her family, stating:
While [my son] was fighting for our country and all back home I received a very disturbing phone call from [an] Agent from the IRS that my son while at Ft Benning training to defend our country, the land of the free, had his identity stolen and fraudulent tax returns were filed with his social security number. This news was devastating, to think that my simply 19 year old son who was defending the very freedom this country stands [for] was wronged by one of those people [he] was willing to die for. My whole family could not believe what was happening. We now had to worry about this terrible act by one of our own. As I tried my best to keep composed and handle all of the gruesome mounds of paperwork to get this straightened out with the IRS, [he] was then denied his tax refund. This created a financial hardship on [him]. We were too afraid to tell [him] while he was deployed because we did not want to worry him and we wanted him to focus only on getting home alive and not have to worry about such an atrocious act by someone who did not even know [him].
Tamaica Hosksins, who was also charged in the same indictment, was previously sentenced to 145 months of imprisonment. Tamika Floyd was previously sentenced to 87 months of imprisonment. Sentencing for Keisha Lanier is scheduled for August 24, 2015.
"No sentence is too strong for those who prey on our fighting men and women,” stated U.S. Attorney Beck. “War is hell on the home front, too, and the family left behind holding things together must be strongly protected. Shame on those vultures who steal from our military and their families!"
“The sentences handed down today, following each defendant’s guilty plea, demonstrate the Tax Division’s commitment to rooting out SIRF crimes across the nation and prosecuting individuals at every level of these complex criminal conspiracies,” stated Acting Assistant Attorney General Ciraolo. She continued that, “victimizing Soldiers, citizens, and the U.S. Treasury will not be tolerated, and the Tax Division will continue to seek significant prison time for anyone involved in these schemes and ask courts to order defendants to pay full restitution to the government.”
“Today’s sentencing of eight criminals who used the identities of American service members and hospital patients to enrich themselves by stealing tax refunds demonstrates the depths of how far criminals will stoop and the extent to which IRS CI will go to fight identity theft,” said Richard Weber, Chief, IRS-Criminal Investigation. “We will use every available resource in collaboration with our law enforcement partners to combat these serious crimes.”
"Individuals who commit refund fraud and identity theft with this degree of trickery, dishonesty and deceit deserve to be punished to the fullest extent of the law," stated Special Agent in Charge Veronica F. Hyman-Pillot, Internal Revenue Service Criminal Investigation. "We, along with the United States Attorney's Office, continue to do our part in protecting the sanctity and integrity of the tax system."
U.S. Attorney Beck and Acting Assistant Attorney General Ciraolo commended special agents of the IRS - Criminal Investigation and the United States Army – Criminal Investigation Division, who investigated the case, and Trial Attorneys Michael C. Boteler and Gregory P. Bailey of the Tax Division and Assistant U.S. Attorneys Todd A. Brown, Jonathan S. Ross, and Kevin P. Davidson of the Middle District of Alabama, for prosecuting the case. Beck and Ciraolo also thanked the U.S. Attorney’s Office of the Middle District of Georgia for their assistance in the case.