HOUSTON (CN) - Scam artists defrauded hundreds of old people, getting their Social Security numbers by promising free "stimulus money," then filing phony tax returns in their names, the Texas attorney general says.
Texas sued Syam Tax Services, Syam Investments, Ashrief International, Shannon Mays, Marshrief Shead, both of Dallas, and Anthony Moore of Fort Worth, in Harris County Court. The attorney general says the defendants are continuing to scam people, even though the scheme has been denounced in at least one news report.
"Defendants are engaged in widespread identity theft and income tax fraud, throughout Texas, including Harris County," the attorney general says in the 20-page complaint.
"Defendants target elderly and disabled consumers and deceive them into providing their Social Security numbers and other sensitive personal information by falsely claiming that these individuals are entitled to free 'stimulus money' or 'Social Security stimulus' money or free 'FEMA stimulus package money' (or similar claims) from the Obama administration and that defendants can assist them with applying for this money.
"Instead, defendants use the information to file fraudulent income tax returns in their names with the Internal Revenue Service." (Parentheses in complaint.)
Texas says the defendants have scammed people in Texas, Tennessee and Alabama.
"Defendants' agents, typically operating out of their homes, recruit friends, relatives, fellow churchgoers, and others in their local communities who have heard of applying for 'free stimulus money' from the Obama administration," the complaint states.
"One consumer was solicited at the grocery store ... Another was approached by a home health care worker of a friend."
The agents have people fill out and sign a "Client profile form" and "Tax Refund form with the consumer's Social Security number, name, address, date of birth and telephone number," Texas says.
They also get a copy of the person's driver's license, bank account information and in some instances their Medicare card.
"Consumers are often hurried through the process and do not realize that the forms they have signed state that Syam Tax Services is authorized to file a tax return on their behalf," the complaint states.
"The Tax Refund Authorization form states that the taxpayer authorized [defendant] Ashrief International, Inc. ('All') to receive a direct deposit of my refund from the IRS and/or state taxing authorities." (Brackets and parentheses in complaint.)
The defendants make false claims for tax credits, Texas says.
"On the returns, defendants Syam Tax Services and Shannon Mays falsely claim an educational tax credit known as the 'American opportunity credit,'" the complaint states.
"The American opportunity credit is a 'refundable tax credit' for qualified secondary education expenses ...
"This tax credit is 'refundable' meaning that if the taxpayer does not owe any income tax (as is the case of most of the consumers targeted by defendants), the taxpayer will receive a tax refund check instead of a credit against the taxes owed ...
"The American opportunity credit refund can be as much as $1,000."
Texas says this credit "is wholly fabricated by defendants" as victims "report they did not authorize defendants to claim this tax credit on their behalf (they were not aware defendants would file a tax return at all) and there is no factual basis for such credit as they are not enrolled as students and do not have any dependents enrolled as students." (Parentheses in complaint.)
Texas adds: "The tax refund is typically issued by the IRS within two weeks of filing the return, and before the IRS has received confirmation from the educational institution that the claimed expenses were in fact incurred by the taxpayer."
The IRS deposits part of the fraudulent tax return in defendants' bank account based on the Tax Refund Authorization form, and the rest is put in the taxpayer's account, or on their prepaid debit card, Texas says.
"Defendants pay the agents $50 in cash per tax refund received by defendants," Texas says.
People are getting wise to the scam, the state says. It claims that defendant Shannon Mays was interviewed recently for an article by the Beaumont Examiner about a police complaint related to the scam.
"In the newspaper article, defendant Mays acknowledged he was contacted by the Port Arthur Police Department about a complaint but blamed the agents for the problems," the complaint states.
"Despite the law enforcement inquiries and direct media attention, defendants continue to file fraudulent returns on behalf of unsuspecting consumers."
Texas seeks disgorgement, damages for deceptive trade and identity theft, injunctions, and it wants the defendants' bank accounts frozen.
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