It was just a matter of time before the Internal Revenue Service (IRS) would begin to process the fallout from the illegal access of tax information using the “Get Transcript” tool. And, as predicted, that information was used to further identity theft-related tax fraud. In January of 2016, three individuals were indicted on charges related to the illegally accessed tax information. Today, one of those individuals, Rapheal Atebefia, a resident of Austell, Georgia, pleaded guilty to one count of money laundering.
Atebefia, together with co-defendants Anthony Alika, 42, and Sonia Alika, 27, were indicted on charges including money laundering, conspiracy to money launder, structuring monetary transactions, access device fraud, and aggravated identity theft.
According to court documents, Atebefia and his co-defendants obtained taxpayer identification, including names and Social Security numbers, from an unknown source. Using that information, Atebefia and his co-defendants accessed the IRS’ “Get Transcript” tool to gather more information about the taxpayers. The stolen names and additional information were then used to file false income tax returns claiming false tax refunds.
To claim the tax refunds, Atebefia and his co-defendants obtained prepaid debit cards and registered the cards in the names of the taxpayers. The income tax refunds were deposited on the debit cards and the prepaid debit cards were then used to purchase money orders. Those money orders were deposited into bank accounts at Wells Fargo and Bank of America; Atebefia next structured cash withdrawals of the proceeds in order to prevent the banks from filing Currency Transaction Reports (CTRs).
Structuring is a way to get around existing federal laws intended to track large transactions. Banks are required to report transactions, including cash deposits and withdrawals, totaling more than $10,000 in any single day: this information is included on forms called CTRs. The purpose of the CTR is to help the government track large transactions and prevent money laundering. Money laundering works this way: the bad guys get money through illegal activities – like stealing, as here – and get rid of the “bad” cash by replacing it with legitimate cash so that it can’t be traced. In this case, the debit cards were replaced with money orders and ultimately, cash in bank accounts. In order to avoid detection by the banks (and eventually, the feds), large transactions are broken down into smaller ones, an act called structuring. So, for example, if you had $100,000 in bad cash that you wanted to replace, rather than putting it all in at once, you would break it down into smaller transactions: say, 11 deposits of $9,091 in a number of different accounts or on a number of different days. Structuring transactions in an effort to avoid reporting is illegal.
(For more on structuring, click here.)
According to the court documents, Atebefia made at least five deposits totaling over $10,000 on February 23, 2015, alone. He and his co-defendants made more deposits over at least two months.
With the guilty plea, Atebefia avoids a trial on money laundering and additional charges. At sentencing, he faces up to 20 years in prison as well as restitution, forfeiture, and penalties; a sentencing date has not been set.
The case was investigated by special agents of IRS-Criminal Investigation and the U.S. Postal Service.
Expect to see more cases like this one: The IRS puts that the total of potentially affected taxpayer accounts at 700,000. As a result, the “Get Transcript” tool on the IRS website remains unavailable for online access until further notice.
