Christopher Zoukis's Blog - Posts Tagged "scam"
Scam Draws Huge Volume of Lawsuits by Former Inmates of New Jersey County Jail
The first inkling clerks in a federal courthouse in Camden, New Jersey had that something might be seriously amiss came in August, when they started getting an unusual number of requests for a packet of legal forms and information prepared for persons wanting to file a pro se civil lawsuits (filed by individuals without the assistance of an attorney).
Within a month, to cope with a strong, ongoing demand, the clerks had to send the packets — usually produced in-house — out to a printer. But the long lines of people waiting to get the packets caused so much congestion in the courthouse hallways that the court clerks began giving them to the guards in the courthouse lobby to pass out to those seeking them.
Then came the lawsuits. Some handwritten, first a trickle and then a flood, seeking money damages for having spent time in the city’s notoriously overcrowded Camden County Correctional Facility. Some complained of having been jailed with three other inmates in a cell designed to house two prisoners; other complained of having had no bed spaces and sleeping on cell floors in rat-infested cellblocks.
And the lawsuits keep coming – as many as 50 in a single day, in a court that averages about 200 civil lawsuits filed per month. Over the span of a few months, around 1,800 filings came in, forcing the court to bring in workers from other district courts to deal with the avalanche of filings. Many of the submissions were invalid, failing to meet either the filing requirements or to state a claim on which the court could grant relief— for example, by failing to meet the two-year deadline for filing garden-variety injury claims, or by alleging harms that could not amount to a constitutional violation.
County officials eventually discovered what generated the tsunami of pro se lawsuits on the county jail’s conditions. Apparently, several people had been working the city’s streets, spreading the news that there was a class-action settlement authorizing cash payouts to anyone who had ever spent time in the overcrowded jail, which had been built to accommodate slightly more than 1,200 inmates but had for long stretches housed 1,800 or more. One account said at least one scammer claimed to have received a cash pay-out of $1,000 per day at the court, and offered to sell potential claimants the legal forms they would need to claim their recovery. Potential claimants likely felt they had a legitimate chance at compensation. There was, in fact, a long-running class action, filed in 2005, by inmates claiming conditions in the Camden jail were so bad as to violate their constitutional rights. But that case neither sought money damages nor had been settled.
In late October, the district judge posted an announcement that there was no class-action settlement or ready payments for the county jail’s ex-inmates, and a similar notice was soon inserted in the pro se form packets. When even those steps failed to stem the tide of claimants, the courthouse got a new notice from the judge denouncing the false rumor for wasting the time of both plaintiffs and court workers.
Within a month, to cope with a strong, ongoing demand, the clerks had to send the packets — usually produced in-house — out to a printer. But the long lines of people waiting to get the packets caused so much congestion in the courthouse hallways that the court clerks began giving them to the guards in the courthouse lobby to pass out to those seeking them.
Then came the lawsuits. Some handwritten, first a trickle and then a flood, seeking money damages for having spent time in the city’s notoriously overcrowded Camden County Correctional Facility. Some complained of having been jailed with three other inmates in a cell designed to house two prisoners; other complained of having had no bed spaces and sleeping on cell floors in rat-infested cellblocks.
And the lawsuits keep coming – as many as 50 in a single day, in a court that averages about 200 civil lawsuits filed per month. Over the span of a few months, around 1,800 filings came in, forcing the court to bring in workers from other district courts to deal with the avalanche of filings. Many of the submissions were invalid, failing to meet either the filing requirements or to state a claim on which the court could grant relief— for example, by failing to meet the two-year deadline for filing garden-variety injury claims, or by alleging harms that could not amount to a constitutional violation.
County officials eventually discovered what generated the tsunami of pro se lawsuits on the county jail’s conditions. Apparently, several people had been working the city’s streets, spreading the news that there was a class-action settlement authorizing cash payouts to anyone who had ever spent time in the overcrowded jail, which had been built to accommodate slightly more than 1,200 inmates but had for long stretches housed 1,800 or more. One account said at least one scammer claimed to have received a cash pay-out of $1,000 per day at the court, and offered to sell potential claimants the legal forms they would need to claim their recovery. Potential claimants likely felt they had a legitimate chance at compensation. There was, in fact, a long-running class action, filed in 2005, by inmates claiming conditions in the Camden jail were so bad as to violate their constitutional rights. But that case neither sought money damages nor had been settled.
In late October, the district judge posted an announcement that there was no class-action settlement or ready payments for the county jail’s ex-inmates, and a similar notice was soon inserted in the pro se form packets. When even those steps failed to stem the tide of claimants, the courthouse got a new notice from the judge denouncing the false rumor for wasting the time of both plaintiffs and court workers.
Ex-convict Uses IDs of 700 Inmates to Gain $600K in Bogus Tax Refunds
Two California men are awaiting sentencing for claiming fraudulent tax refunds made with the names and identification information of more than 700 jail and prison inmates.
On Jan. 24, a jury in a federal case in California convicted Howard Webber, a 52-year-old ex-convict who has served time in Milwaukee, Santa Clara and San Quentin, of wire fraud, mail fraud and conspiring to commit mail fraud, for his part in the scam.
Webber and accomplice Clifford Bercovich, a 69-year-old disbarred lawyer, set up a bogus firm, Inmate Assets Recovery and Liquidation Services, and Webber signed up inmates incarcerated with him for a service that supposedly could help them obtain government benefits. At least some of the inmates reportedly received $75 from the schemers to provide their identifying information. Using the information, the defendants then filed for bogus tax refunds in the inmates’ names.
Over 700 tax refunds wrongly issued in the names of the inmates went not to the inmates in whose names the refunds were claimed, but instead to mail boxes and bank accounts Webber and Bercovich had set up. Federal prosecutors claimed the pair split more than $600,000 in the approximately two years (2010 to 2012) their scam was running.
The bogus tax returns claimed income from self-employment and took advantage of refundable tax programs like the Earned Income Tax Credit (EITC), the Making Work Pay Credit, or both. Those programs provide for cash refunds to low-to-moderate income taxpayers, even those not earning enough to owe taxes.
The programs have often been criticized as fraud-prone. The inspector general for the Internal Revenue Service has estimated over one-fifth of EITC payments are improperly issued, though defenders of the credit argue that payments can be deemed improper without being fraudulent. They also point out government officials estimate at least 3.5 million, and perhaps as many as 7 million, taxpayers who meet the standards for EITC payments do not file for them.
From a modest start in 1975, the EITC program has been repeatedly extended and expanded, and now is one of the federal government’s largest anti-poverty programs. Many states have also added similar programs to their tax laws. The program paid out more than $7 billion to about 29 million families in 2014. Even so, the EITC program is the only one at IRS which White House budget officials have designated as “high-risk.”
As a result, Congress has ordered a slowdown of refund payments to EITC claimants, to allow more time for checking for fraud or identity theft. The IRS says in 2014 it paid out $3.1 billion to identity thieves who filed fraudulent returns, down from $5.8 billion in 2013. During those two years, the agency says it detected and blocked payments on almost $47 billion in fraudulent claims for refunds.
Webber’s accomplice, Bercovich, pleaded guilty in December to conspiracy, mail fraud and aggravated identity theft charges. He initially persuaded the trial court he could not be charged with aggravated identity theft, since the identity information had been voluntarily provided. But a three-judge panel of the federal appeals court in San Francisco disagreed and reinstated that charge.
On Jan. 24, a jury in a federal case in California convicted Howard Webber, a 52-year-old ex-convict who has served time in Milwaukee, Santa Clara and San Quentin, of wire fraud, mail fraud and conspiring to commit mail fraud, for his part in the scam.
Webber and accomplice Clifford Bercovich, a 69-year-old disbarred lawyer, set up a bogus firm, Inmate Assets Recovery and Liquidation Services, and Webber signed up inmates incarcerated with him for a service that supposedly could help them obtain government benefits. At least some of the inmates reportedly received $75 from the schemers to provide their identifying information. Using the information, the defendants then filed for bogus tax refunds in the inmates’ names.
Over 700 tax refunds wrongly issued in the names of the inmates went not to the inmates in whose names the refunds were claimed, but instead to mail boxes and bank accounts Webber and Bercovich had set up. Federal prosecutors claimed the pair split more than $600,000 in the approximately two years (2010 to 2012) their scam was running.
The bogus tax returns claimed income from self-employment and took advantage of refundable tax programs like the Earned Income Tax Credit (EITC), the Making Work Pay Credit, or both. Those programs provide for cash refunds to low-to-moderate income taxpayers, even those not earning enough to owe taxes.
The programs have often been criticized as fraud-prone. The inspector general for the Internal Revenue Service has estimated over one-fifth of EITC payments are improperly issued, though defenders of the credit argue that payments can be deemed improper without being fraudulent. They also point out government officials estimate at least 3.5 million, and perhaps as many as 7 million, taxpayers who meet the standards for EITC payments do not file for them.
From a modest start in 1975, the EITC program has been repeatedly extended and expanded, and now is one of the federal government’s largest anti-poverty programs. Many states have also added similar programs to their tax laws. The program paid out more than $7 billion to about 29 million families in 2014. Even so, the EITC program is the only one at IRS which White House budget officials have designated as “high-risk.”
As a result, Congress has ordered a slowdown of refund payments to EITC claimants, to allow more time for checking for fraud or identity theft. The IRS says in 2014 it paid out $3.1 billion to identity thieves who filed fraudulent returns, down from $5.8 billion in 2013. During those two years, the agency says it detected and blocked payments on almost $47 billion in fraudulent claims for refunds.
Webber’s accomplice, Bercovich, pleaded guilty in December to conspiracy, mail fraud and aggravated identity theft charges. He initially persuaded the trial court he could not be charged with aggravated identity theft, since the identity information had been voluntarily provided. But a three-judge panel of the federal appeals court in San Francisco disagreed and reinstated that charge.
