TaxAdministrationUS tax officials nabbed in $US16m scam

US tax officials nabbed in $US16m scam

Two Washington DC-based tax officials and three other people have been arrested in a massive scam using false tax refunds to steal $US16m

Two mid-level employees from Washington DC’s
Office of Tax
and Revenue
and three alleged accomplices were charged yesterday with
offences, including mail fraud, bank fraud and money laundering, according to US
media reports.

Authorities told The Washington Post they had evidence of doctored
refunds dating back to 2004 totalling $US16m (£4.5m), but the total amount could
be more and the activity might have started as early as 2000.

The group allegedly used the Washington DC’s property tax refund system for
residents or businesses that overpay their taxes. One of the accused tax
officials approved vouchers for all 42 fraudulent refunds, according to the
affidavit. It is alleged the money was put into the accounts of front companies
controlled by the family members.

Natwar Gandhi, Washington CD chief financial officer and head of the tax
office, said such schemes could occur despite the city’s system for checking for
fraud. He said four high-ranking finance officials, including a deputy financial
officer in charge of the tax office, have resigned.

Further reading:

US CFOs reject auditors’ role in detecting fraud

Read
story in The Washington Post

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