Compliance Blog

Written by Shari R. Pogach, Regulatory Paralegal

Last month I blogged that according to its 2013 annual report, the Federal Trade Commission’s (FTC’s) data indicates the number one common consumer complaint continues to be identity theft.  The FTC also reports that a significant percentage of the consumer identity theft complaints are related to tax fraud.  

Often real world examples of criminal activity can be very helpful when it comes to training your front line staff.  Such examples are relatable and can be used to get your staff talking and thinking about what to look for when interacting with members on the front line.  The Internal Revenue Service (IRS)  has a section on its site with write-ups on identity theft scenarios, Examples of Identity Theft Schemes - Fiscal Year 2014, pulled from public record documents on file within the judicial district where the cases were prosecuted.  Here are two cases from the IRS website of identity theft and other fraud specifically involving financial institutions:

“Florida Woman Sentenced for Several Fraud Schemes

On March 26, 2014, in Tampa, Fla., Latasha Callens was sentenced to 149 months in prison, five years of  supervised release and ordered to pay a $223,798 money judgment. Callens pleaded guilty on Dec. 3, 2013 to  bank fraud, access device fraud, mail fraud and aggravated identity theft. According to court documents and  statements made in court, from as early as July 2011 through her arrest in May 2013, Callens defrauded banks  and individuals on at least 58 occasions during a two-year period. In one of her schemes, Callens approached  individuals, usually at ATMs, and told them about her need to cash a check and her inability to deposit the check  into her bank account. She then convinced the individuals to deposit the checks into their own accounts and withdraw the funds for her. She sometimes gave them $100 for their trouble. In each case, the checks were worthless. They were generally drawn on closed accounts, because the checks and checkbooks had been stolen. In another scheme, for the tax years 2010, 2011, and 2012, Callen defrauded the IRS and certain taxpayers by electronically filing false and fraudulent tax returns, using stolen identities and, thereby, obtaining refunds. She sought approximately $800,000 in fraudulent tax returns.

Alabama Bank Employee Sentenced for Tax Refund Fraud

On Feb. 19, 2014 in Montgomery, Ala., LaQuanta Clayton was sentenced to 21 months in prison, three years of supervised release and ordered to pay $185,730 in restitution. Clayton pleaded guilty in July 2013 to theft of government property. According to court documents and statements made in open court, Clayton used her position as a bank teller to open bank accounts in the name of another individual without his knowledge. Tarrish Tellis, the leader of the tax-fraud ring, directed Clayton to open multiple bank accounts in order to receive electronic deposits of fraudulent tax refunds. Tellis pleaded guilty to related crimes in October 2013. Clayton would facilitate the withdrawal of this money and give it to Tellis and other individuals involved in the scheme. Clayton opened at least five bank accounts, which she used to receive fraudulent tax refunds.” (Emphasis mine.)

How do they come up with this stuff?! Speaking of training resources, here come my shameless plugs…

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BSA Blast and BSA Quiz – The April edition of the BSA Blast is now available for NAFCU members here.  (You will need your member login to access.)  In this issue we discuss the Financial Crimes Enforcement Network’s new practice in enforcement actions against Bank Secrecy Act (BSA) violations.  There is also a challenging new BSA quiz you can use for staff training. 

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