Texas Resident Receives 14-Year Sentence for Orchestrating $110 Million Tax Refund Scam

A Texas resident named Abraham Yusuff has been sentenced to over 14 years in prison for his role in a scam aimed at stealing more than $110 million in tax refunds, as per the Department of Justice (DOJ).

Details of the Scam

Yusuff, a resident of Round Rock, Texas, received his sentence on September 6, as per a DOJ press release. Yusuff was found guilty of being the mastermind behind a "stolen-identity-refund-fraud" scheme that took place between 2018 and 2021. As part of the scam, Yusuff and his accomplices contacted the IRS, pretending to be Certified Public Accountants and other professionals who were authorized to represent multiple taxpayers. The group requested the IRS to change taxpayer addresses on file and send tax-related information to false addresses under their control. This information included wage records and account transcripts. The data obtained from the IRS was then used to file over 370 returns claiming fraudulent refunds. The group instructed the IRS to divide the refunds among several prepaid debit cards registered in the victims' names. Before issuing the refunds, the IRS sent verification letters. However, these letters were sent to addresses controlled by the scammers, who then directed the agency to release the refunds. The group aimed to collect over $110 million from the scheme. They managed to secure $30 million in fraudulent refunds from the IRS, according to Acting Deputy Assistant Attorney General Stuart Goldberg of the DOJ’s Tax Division.

Consequences of the Scam

On Friday, two of Yusuff’s accomplices were sentenced to over two and three years, respectively. Yusuff was ordered to pay over $30 million, and the other two were ordered to pay more than $3.5 million combined. Christopher Altemus Jr., the special agent in charge of IRS-CI Dallas Field Office, stated that identity theft is a despicable act and the sentencing serves as a stark reminder of the severe consequences of fraud and the pursuit of quick gains. So far, seven individuals have been sentenced for their involvement in the crime, with the other four receiving prison terms ranging from 12 to 30 months.

Increasing Cases of Identity Theft

The IRS has reported an increase in identity theft cases. During the 2024 filing season, the agency confirmed 15,242 instances of fraudulent returns filed by scammers to claim refunds of legitimate taxpayers. The IRS prevented the issuance of over $180 million in fraudulent returns. For the 2024 season, there has been a 20 percent increase in confirmed identity theft cases registered compared to 2023. The IRS’s Identity Theft Victims Assistance unit received 294,138 reports of identity theft during the 2023 fiscal year, the second-highest in five years. In response to the rising number of scams threatening tax systems and taxpayers, the IRS announced a new coalition with industry members last month. The coalition aims to expand outreach and education about emerging scams, develop new methods to identify potentially fraudulent returns at the point of filing, and create infrastructure improvements to protect taxpayers and tax systems. The IRS regularly releases a list of warning signs that taxpayers should be aware of to identify whether their personal data has been compromised.

Warning Signs of Identity Theft

Signs of potential fraud include receiving letters from the IRS about a suspicious tax return not filed by the individual, inability to e-file a return due to a duplicate Social Security number, receiving a tax transcript that was not requested, and getting an IRS notice for an online account created in the taxpayer’s name. The U.S. Federal Trade Commission advises victims of tax identity theft to report it with the agency at identitytheft.gov.

Bottom Line

The case of Abraham Yusuff and his accomplices serves as a stark reminder of the severe consequences of identity theft and fraudulent activities. It also highlights the importance of being vigilant and aware of potential scams. What are your thoughts on this case? Do you think the punishments are adequate? Share your thoughts and this article with your friends. Remember, you can sign up for the Daily Briefing, which is delivered every day at 6pm.