tbo: Tampa Bay Online.
Saturday, Apr 21, 2018
  • Home
Business News

Jailed tax cheat’s warning: Just ‘don’t do it’

CLEARWATER - Russell Simmons says it was just too easy to steal hundreds of thousands of dollars from the federal government.
Speaking from the Pinellas County Jail, where he was waiting to be transferred to a federal prison to serve his 15-year sentence, the notorious tax fraud criminal had a message for others who would follow in his footsteps: “Don’t do it.”
And he has some advice for the government and businesses, too.
“I think they need to not make it so simple for people to be able to go online and get free information,” he said. “You’re giving people too much information on a person that’s either alive or even deceased. If you work in a doctor’s office or at a nursing home, don’t let a person’s information be so easy to access for sale to other individuals.”
Simmons says he got hundreds of thousands of dollars in illegitimate refunds; prosecutors say the figure was closer to $2 million. In an exclusive interview with The Tampa Tribune and News Channel 8, Simmons said he was speaking out “just to try to make people aware that I have no ill will toward the system because the system works.”
“I want people to know at the end of the day, you’re going to be here (in prison) if you don’t stop. People’s identity is precious to them.”
Simmons embodies the wave of fraud that put Tampa on the national map as the top city for stolen identity refund fraud in which street criminals use other people’s names and Social Security numbers to file bogus tax returns and get fraudulent refunds.
Simmons said he became addicted to the easy money that flooded the streets of the Tampa area in the past two years.
He heard that other people were getting rich that way and decided to try it himself. He was broke and needed money to get his car dealership off the ground.
Online computer tax programs such as TurboTax, he said, made the fraud possible.
The online system, he said, “walks you actually step by step on how to complete a tax form, and if you make a mistake it will tell you, you made a mistake and go back and correct it or change it. So you’re just really basically looking at the computer walking you through how to complete a tax form.”
He got better at the fraud through trial and error, Simmons said. He would tinker around, clicking different boxes for deductions and credits, changing income figures to make the refunds higher. The “refunds” he obtained, he said, were each more than $9,000.
He said he would make up information, and the program would tell him if it worked. If it didn’t, he would change his entries until the system accepted them. He said he would even use fake addresses.
“It don’t have to be an actual address,” he said. “You can just make up an address as long as you have a proper ZIP code.”
Simmons remembers the first time he tried to get a fake refund. The IRS rejected his attempt because someone else had filed a tax return using that identity.
The third try, though, worked.
“It was exciting, you know,” he said. “It was such an easy and simple process. … Thousands of dollars for a few minutes’ work.”
And so it began. Some days he would file five returns, other days up to 20.
“It’s not a lot of work,” he said. “You could probably start a return and complete a return within five to seven minutes.”
He developed a formula that employed a teachers’ tax credit. The formula worked, he said, even when the person whose identity being used was more than 90 years old.
Simmons said one way to cut down on fraud would be to block returns filed by people who make repeated changes to the return. He also suggested the IRS pay attention to people’s previous years’ filings.
“Maybe that’s something that they can filter in to where at a certain age, especially if you’ve never filed a return ever before, all of a sudden you’re trying to file a return for an enormous amount of money or for any amount of money — it could be for $1,000 — that should throw up a red flag to where maybe this person is not really the right person that’s trying to file the return,” he said.
Simmons was prolific. Altogether he tried to steal $8.9 million by filing more than 600 fraudulent tax returns in 2011, authorities say. The IRS rejected more than $5.5 million worth of refunds but approved $3.4 million.
Other refunds were stopped, either by TurboTax or through other means. In the end, according to the IRS and Secret Service, Simmons obtained $1.8 million in fraudulent refunds.
Simmons said the government numbers were inflated but admitted stealing hundreds of thousands of dollars. He denied being a major player, describing himself as “probably a middle-of-the-road kind of guy.”
The fraud, he said, was everywhere.
“It’s probably bigger than it was when the crack era hit because it’s so much easier to get information to get money that’s all profit,” he said. “Everything you do is profit.”
People who formerly had no money in their pockets and no job, he said, were suddenly driving expensive cars and wearing high-end jewelry.
“You can only assume, probably everybody that you talk to or meet at the red light had done something to a degree.”
Tampa police say they got wind of Simmons’ fraud in late 2010, but he said he didn’t start committing the fraud until February or March 2011.
Simmons also denied another assertion by law enforcement — that he laundered other criminals’ fraudulent Treasury checks through his car dealership.
“I never got Treasury checks from anybody,” he said.
He mostly stole money by having fraudulent refunds deposited onto debit cards he bought from other people or from retail stores.
Simmons said he got most of the identities he used to file returns through an online database of deceased people maintained by Social Security.
Other identities he purchased, and others he found himself. He said he went to a doctor’s office and found the patient sign-in sheet on a clipboard had dates of birth and Social Security numbers. He used his phone to snap pictures of the sheet, then used that information to file tax returns.
The money mostly went to help his business, Simmons said. But he also bought clothes and diamond jewelry. He said he paid $13,000 for a custom-made diamond pendant with his initials.
He drove a Jaguar and a Bentley.
Simmons said he didn’t talk to other people about his fraud, even though he was sure others were doing it, too. “I just wanted to keep it to myself,” he said. “But a lot of people, for sure, were doing it.”
Simmons said he felt sympathy for identity theft victims.
“It gets to the point where, even though you were getting money in, you still have to feel some type of remorse for the people that you’re doing that to because they didn’t ask for that. They didn’t deserve that. You know what I mean?
“They didn’t want to have their identities stolen and it was wrong. It’s just there’s no right to it. … If I could do it all over again, I wouldn’t do it because it’s not worth your freedom; it’s not worth another person’s aggravation to have to go through now. You’ve taken their identity. Now they can’t do their own taxes. … They can’t go out and get things for themselves or for their family. That’s not right.”
Simmons was arrested on state identity theft charges on Aug. 31, 2011, when federal and city law enforcement searched his business and several others in Tampa in a high-profile series of raids dubbed Operation Rainmaker.
Simmons said the arrest was “terrifying” and sent a clear message to him that he was through.
He was released on bail within hours, though, and a few months later, the state charges were dropped. Tampa police seethed because it took months before the IRS made a federal case.
As the investigation wore on, Simmons became a symbol of everything that was wrong with the way these cases were being handled. His name was on the lips of the chief of police and was raised in the halls of Congress during testimony about the fraud that had become an embarrassment to the city.
Officials said they had every reason to think Simmons was continuing to commit fraud.
As evidence of that, they noted he was stopped in November 2011 at the airport in Orlando, where agents seized $75,000 in cash from him and an associate who were flying to see a fight in Las Vegas.
But Simmons insists he stopped committing tax fraud after his arrest. Just $22,000 of the seized cash was his, he said, of which about $9,000 was the proceeds from a car he had sold. The rest of the money belonged to eight or nine people who are still trying to get it back, he said.
“That wasn’t my money,” he said.
In March, Simmons was sentenced to 15 years in federal prison, the highest sentence anyone has received in Tampa for tax refund fraud.
As much as he says he wishes he didn’t have to serve so much time, Simmons said the sentence is fair for what he did. It could have been much worse, he added.
“I thank God I only got 15 and not 20 years,” he said.
Still, he said, he mourns that he won’t get to see his five children, particularly his 2-month-old son, whom he won’t see take his first steps.
He said he hopes his sentence makes other people stop committing fraud.
“Hopefully, they’ll see it’s not a crime they’re going to get away with.”
Simmons said he thinks some of the IRS and law enforcement efforts to stop the fraud are working and that the fraud is decreasing.
His message to those who are still committing fraud:
“You’re going to get caught. It’s going to come to an end. Stop it. Leave people’s identity alone. People have worked too hard to secure what they have. Get a job. Don’t take it from them. They don’t deserve that. They’re elderly people, basically the cornerstone of our world. They worked for years to get what they have. You don’t take it from people like that. You don’t do that.”

[email protected]

(813) 259-7837

Twitter: @ElaineTBO

Weather Center