USD students suspected in fraud investigation

On April 25, the Vermillion Police Department was notified of a man acting suspiciously at an ATM in downtown Vermillion.

Follow-up investigation revealed the man was using a debit card that had been issued as part of a tax return to withdraw money and appeared to be attempting to conceal his identity from the ATM camera.

Further follow-up uncovered a conspiracy to file false tax returns using stolen identities.

The conspirators are able to have thousands of dollars placed on debit cards which were then mailed to them. The money was then drawn out of the debit cards before the IRS is able to determine that a fraud has been perpetrated.

Police detectives contacted and worked closely with U.S. Treasury Special Agents to secure and serve search warrants on the suspects, who were USD students living in the dorms.

The USD police department and university officials have cooperated fully and continue to assist in the ongoing investigation. The extent of the conspiracy still is being investigated.

"IRS Criminal Investigation has made investigating refund fraud and identity theft a top priority," said Kelly R. Jackson, special agent in charge of the St. Paul field office. "Filing fraudulent tax returns in the names of other individuals may result in significant harm to those individuals whose identities were stolen, as well as a monetary loss against the U.S. Treasury."

Refund related identity theft occurs when the identity thief uses the victim's SSN to file a false income tax return to obtain funds. If the thief files before the victim, the victim may not receive his or her refund in a timely manner.

Officers found convincing evidence that the suspects were attempting to collect names and social security numbers in the Vermillion area. They believe that if the suspects were able to collect that information it was likely used to file fraudulent tax returns. This type of tax fraud is widespread and has made national news in the Tampa, FL, area.

USD President James W. Abbott issued the following statement Tuesday on behalf of the University of South Dakota:

"It disappoints me to think any of our students could be involved. We will assist the investigation in any way we can. If necessary, our students will be held accountable by not only the judicial system but the university as well."

If you believe someone has filed a fraudulent tax return using your information the IRS provides the following direction:

  •  Contact the IRS Identity Protection Specialized Unit using the toll-free number (800) 908-4490, or visit the IRS Web site at www.irs.gov.
  •  You may also contact your local IRS-CI at (651) 312-8088. The IRS-CI duty agent will respond as soon as possible to assist you and evaluate the information obtained.

The process for reporting identity theft does require the taxpayer to work closely with the IRS to verify the crime and resolve and restore the victim's tax return records. Anyone who has information regarding identity thefts or the related receiving of tax return funds in the Vermillion area should contact the Vermillion Police Department or the IRS.

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