TAMPA —
A former police officer who used a law enforcement database to help criminals steal more than $1 million from U.S. taxpayers begged a federal judge for mercy Thursday, saying he “did something stupid.”
“I lost my head and I violated everything I stood for,” Dana Brown said.
As Brown appeared in court, legislators in Washington convened yet another hearing into the explosion of identity theft and tax refund fraud that has rocked Tampa streets and spread throughout the country.
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Authorities say billions of dollars in taxpayer funds are being stolen by criminals who steal personal information from innocent citizens and use it to file tax forms with phony income and deduction amounts. The forms are submitted to the government, which sends “refunds” to the thieves.
Last year, the IRS says it stopped $6.5 billion in fraudulent tax refunds from being sent. But the agency issued “significantly greater” fraudulent refunds than it stopped, said J. Russell George, inspector general for tax administration, in testimony submitted Thursday to a House of Representatives subcommittee.
In Tampa, some of the fraudulent refunds were laundered by Riad Suliaman and his brother, Nedal Ahmad, owners of Empire Street Wear, authorities say. Brown, the former Ocala police officer, admitted helping them with information he obtained from a law enforcement database.
Suliaman used the information from Brown to make phony drivers licenses to help him negotiate fraudulent refund checks at banks.
Suliaman was sentenced to more than five years in a tax fraud case prosecuted in Fort Lauderdale. Ahmad was arrested last month and his case is pending.
The Secret Service estimated $100,000 worth of fraudulent Treasury checks and preloaded debit cards passed through Empire Street Wear every week for more than a year – beginning in January 2011 and continuing up to Ahmad’s arrest last month.
Brown on Thursday apologized to his family and friends and to the justice system. “I failed it horribly,” he said. “This mistake I made will resonate with me for the rest of my life.”
Brown, who served in the Army 15 years before joining the police department, faces about nine years in prison under federal sentencing guidelines. His sentencing was postponed when U.S. District Judge Mary Scriven said she wanted more information about the co-conspirators involved.
Assistant U.S. Attorney Amanda Kaiser said the conspirators in this case tried to steal $1.4 million from the government, but that some of the checks were seized before they were cashed so the actual loss was $867,000.
Kaiser said Brown ran data inquiries on thousands of people, and agents were able to link 195 of those inquiries to tax fraud victims. “That’s a lot of people” who now have to go through the arduous process of dealing with the IRS to straighten out their returns, she said.
In Washington, Subcommittee Chairman Todd Russell Platts, R- Pa., said the level of service provided by the IRS to tax fraud victims is “unacceptable.”
The IRS established a Taxpayer Protection Unit to deal with taxpayers who receive notices that their returns have been flagged for possible fraud. But recently, the unit was able to respond to less than 35 percent of callers, and they had to wait on hold for more than an hour, Platts noted.
“That is not how we should be treating victims,” Platts said. “That we set up a special unit is a good thing, but if the unit can’t deliver to help the victims, that’s not a good thing.”
“I agree,” said Steven Miller, the IRS deputy commissioner of service and enforcement. “I know we have added more staffing, but maybe we have not added enough.”
George, the inspector general, said the IRS needs to change the way tax refunds are processed. He said the agency sends out refunds before it is able to compare information on tax returns to income and withholding information from employers. Access to this employer information when the returns are processed is “is the single most important tool the IRS could have to identify and prevent tax fraud,” George said.
The way the system is set up, George said, “If someone wants to commit tax fraud, they are able to claim more in a refund than they’re entitled to because the IRS didn’t, on a timely basis, compare the information. And that is a major problem.”
Miller agreed that the problem is significant, but he said the IRS is limited because it doesn’t have information from employers when tax returns are submitted. “We do what we can, but under the current systems, we don’t have the information to match,” he said.
He said officials are exploring ways to address that problem.
Platts twice cited Tampa in questioning officials about tax fraud. Inquiring about the wisdom of allowing tax refunds to be deposited on debit cards, Platts noted police here have discovered drug dealers in possession of the cards.
He also cited the city in reference to a pilot program that is about to be launched in Florida in which identity theft victims will be asked to sign waivers to allow their fraudulent tax return information to be shared with law enforcement.
“I think that’s a very positive step,” Platts said, “and while I’m very displeased with the level of service in the TPU, the Taxpayer Protection Unit, I want to acknowledge that step.”
