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Some U.S. banks awash in ID theft tax-fraud proceeds as IRS cracks down

Feb 03 2012 Brett Wolf, Compliance Complete

Despite a new federal crackdown announced this week aimed at combating tax refund fraud involving the use of stolen identities, current law enforcement efforts are not enough and fraudsters are still pumping massive sums of tax fraud proceeds through U.S. banks, sources told Thomson Reuters. "IRS and Justice should have been doing this three years ago. This widespread criminal activity is more profitable than drug dealing," said regulatory consultant and investigator Jim Dowling, a former Internal Revenue Service criminal investigator special agent who also acted as an anti-money laundering (AML) advisor to the Office of National Drug Control Policy. The Internal Revenue Service this week said that in late January it worked with the Justice Department's Tax Division and U.S. Attorneys' offices across the country to target more than 100 people in 23 states suspected of involvement in the theft of thousands of identities and taxpayer refunds. The resulting indictments, arrests and

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