Two plead guilty in tax refund fraud -U.S. authorities

WASHINGTON Thu Nov 21, 2013 6:34pm EST

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WASHINGTON Nov 21 (Reuters) - Two men pleaded guilty to participating in a $65-million case of identity theft-tax refund fraud, U.S. authorities said on Thursday, in one of the largest schemes of its sort yet uncovered.

Michael Senatore of Moscow, Pennsylvania, and David Pinski, of Fort Lee, New Jersey, pleaded guilty to charges of conspiracy and theft of government property, U.S. Attorney Paul Fishman in New Jersey said in a statement.

Both men were scheduled for sentencing in March 2014.

Samuel DeLuca, a lawyer for Pinski, 43, declined to comment on behalf of his client. A lawyer for Senatore, 75, did not return calls for comment.

Tax refund fraud has increased dramatically in recent years. Scammers typically use stolen names and Social Security numbers to file phony electronic tax forms for IRS refunds.

In this scheme, beginning in 2007, more than 8,000 fraudulent tax returns were filed by dozens of unnamed people, according to the district attorney's statement.

The returns sought more than $65 million in refunds, including more than $12 million that the IRS erroneously sent and was lost for good, the statement said.

Pinski and Senatore used the stolen names and Social Security numbers of Puerto Rican citizens to file fake tax returns. Then the two directed the IRS to mail refund checks to addresses covered by a single mail carrier, authorities alleged.

During the course of the scheme, hundreds of refund checks were mailed to a small number of addresses in New Jersey towns, the authorities said.

More Americans' identities were stolen in tax refund crimes in the first six months of 2013 than in all of 2012, according to the Treasury Inspector General for Tax Administration (TIGTA), the IRS's watchdog. (Reporting by Patrick Temple-West; Editing by Kevin Drawbaugh and Ken Wills)

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