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News of Tax Refund Fraud Spurs Call for House Probe


September 14, 2011 (Tampa Tribune, Fla.) Angered by reports of rampant tax fraud, U.S. Rep. Kathy Castor is asking two congressional committees to convene hearings into the operations of the Internal Revenue Service.



Speaking in a telephone interview from Washington, Castor said she was outraged when she read a report in The Tampa Tribune about large-scale tax fraud, which local authorities say amounts to hundreds of millions of dollars stolen in the Tampa area alone.

"We're up here fighting budget battles where many cuts are eating into fundamental initiatives, public safety and nutrition for the elderly and Head Start," she said. "When I see that kind of outrageous criminal activity, it's just simply outrageous."

Castor, D-Tampa, on Monday sent a letter to the heads of the Judiciary Committee and Ways and Means Committee citing the recent crackdown in Tampa on fraud that involves stealing identities of the living and the dead to file phony tax returns to obtain hundreds of millions of dollars in "refunds."

The congresswoman said she plans to meet next week with local investigators to get a better idea of the obstacles they face investigating and prosecuting the thieves. Police say one of their biggest hurdles is federal tax law, which prohibits the IRS from sharing tax return information needed to investigate cases and prove fraud.

Investigators have had to find other ways to bring charges, using identity theft and credit card fraud laws instead.

On Friday, U.S. Sen. Bill Nelson introduced legislation aimed at reducing the fraud and looking for ways to provide local law enforcement the ability to investigate it. Castor said she expects to co-sponsor Nelson's legislation in the House but also thinks more wide-ranging laws are needed.

"I understand there are some privacy considerations," she said. "It may be time to modernize the law here. It may be too easy to get a fast and hasty turnaround of refunds."

Castor said she thinks local law enforcement officials are correct when they say they believe this kind of fraud is happening across the country. "Tampa criminals aren't so special," she said.

One example is that of an Orlando postman who was recruited by a conspirator to intercept tax refund checks issued on fraudulent returns the conspirator had addressed to an Orlando apartment complex, according to the U.S. attorney's office in Tampa.

The postman, Carmelo Rosado Jr., 40, was to deliver the checks to the conspirator in exchange for payment for his participation in the scheme, authorities say. On March 7, Rosado stole 68 checks, they say. He agreed on Tuesday to plead guilty and faces 20 years in prison, the U.S. attorney's office said.

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