State House unanimously passes for tax fraud bill
When the state House of Representatives passed legislation Wednesday to make it easier to arrest identity thieves, at least one legislator had a personal reason for his yes vote.
State Rep. Ross Spano, R-Valrico, was a victim of the tax refund fraud that has become popular among local street criminals who have stolen hundreds of millions of dollars from the federal government.
“When something like that hits home on a personal level, you can see the need” for the Legislature to act, Spano said before the vote.
The House voted 118-0 to approve the bill sponsored by Seminole Republican Larry Ahern that will enable law enforcement to arrest people found with evidence of tax refund fraud, such as ledgers filled with names and Social Security numbers.
“I think everybody gets it that we're No. 1 in identity theft and this is a big step in the right direction of solving that problem,” Ahern said.
An identical bill sponsored by Sen. Arthenia Joyner, D-Tampa, is scheduled to be heard today in the Senate Appropriations Committee. Joyner introduced her bill in response to a joint investigation by The Tampa Tribune and News Channel 8 into identity theft and tax fraud.
Ahern said he has asked the Senate to approve the House version of the legislation so it immediately can be sent to the governor for his signature. He hasn't talked to the governor yet, but plans to call to secure support. If passed by the Senate and signed, the law would go into effect no earlier than July.
Under current law, when police and deputies find suspects with ledgers of Social Security numbers and dates of birth or debit cards in other people's names, the officers can only seize the evidence and let the suspects go, hoping to later construct a case. That's because the law requires proof of intent to commit fraud.
Investigators often are unable to obtain evidence, such as videos of the suspects using the debit cards or bank records that show the identifying information was illicitly used. So charges are never brought.
The legislation removes the intent requirement, allowing investigators to immediately arrest and charge suspects who have no legitimate reason to possess the identity information, whether or not there is evidence the information was used.
Investigators say thieves steal personal information from a variety of sources, including medical offices, billing companies, financial institutions and online. They use the information to file tax returns with phony financial information to obtain fraudulent tax refunds.
As the Legislature convened in Tallahassee on Wednesday, a prominent suspect pleaded guilty to tax fraud charges in Tampa.
Maurice “Thirst” Larry was among the suspects committing tax fraud when police searched their hotel room in a drug investigation in September 2010. It was the first time Tampa police came upon an active tax fraud operation. Larry also pleaded guilty to committing tax refund fraud with his girlfriend, Rashia Wilson, who has called herself the “queen” of tax fraud and who pleaded guilty earlier this month.
Victims of these identity thieves have reported maddening experiences trying to get their personal cases resolved with the IRS, frequently having to wait months or even years to obtain their legitimate refunds. An inspector general's report last May detailed a Byzantine system of unreturned phone calls, conflicting regulations and unskilled Internal Revenue Service employees giving victims incorrect information.
But Spano said his experience with the IRS was different, possibly because he wasn't due a refund. Spano said he owed the government money and had sent a check for his estimated taxes in April when he filed for an extension.
When he called the IRS in September or October with a question, he was told he had been a victim of identity theft.
“I had seen it in the newspapers and there had been some coverage on the TV news,” Spano said. “You always think it's going to happen to the other guy. Then when it finally does happen to you, you're a little bit shell shocked. I was surprised, I was incredulous. I felt a little bit violated, I guess you might say angry.”
Spano said he was put on hold for about 20 minutes and then given a phone number for someone who could help him. The IRS employee he dealt with was “a very pleasant gentleman, very gracious.”
Spano said he doesn't think his position as a legislator had any bearing on his treatment because he didn't mention it to the IRS.
Spano said the IRS told him the agency had detected the fraud and did not issue a refund to the thief. He has no idea how someone stole his identification.
When told that law enforcement says a lot of the information is stolen from medical facilities, Spano said, “I had been in the hospital a couple of times over the last few years, so that's a very good possibility.”
Spano and Ahern said the legislation will give law enforcement the authority it needs to lock up the bad guys.
“When someone has a briefcase full of personal identification for other people, I think it's safe to assume there's some kind of (bad) intent,” Spano said. “We want to give law enforcement the ability to crack down on it and prevent it.”