Monday, June 11, 2012

Was approved by several government agents????

Salem woman arrested in $2.1 million Oregon tax fraud case

Published: Wednesday, June 06, 2012, 4:16 PM Updated: Wednesday, June 06, 2012, 7:54 PM
Harry Esteve, The Oregonian
oregon_capitol_flag.JPGView full sizeThe Oregon Department of Revenue issued a debit card with $2.1 million on it to a Salem woman who filed a fraudulent tax return. She was arrested Wednesday.
REYES_KRYSTLE.jpgView full sizeKrystle Marie Reyes
Authorities arrested a Salem woman Wednesday who is accused of swindling the Oregon Department of Revenue out of more than $2 million by filing what could be one of the biggest fraudulent tax returns in state history.

Krystle Marie Reyes was booked into the Marion County Jail on charges of computer crime and aggravated theft, according to a probable cause affidavit obtained by The Oregonian.

According to the affidavit, Reyes used Turbo Tax, a popular tax preparation software package, to file a faked 2011 income tax return that reported wages of $3 million and claimed she was owed a $2.1 million refund. The state authorized the refund, and Turbo Tax issued Reyes a Visa debit card with the full refund amount.

The affidavit had no other background information on Reyes, 25. A preliminary check of state records showed little more than a traffic violation.

State revenue officials did not discover the fraud until Reyes reported the card as lost or stolen. In the meantime, she racked up more than $150,000 in purchases. Reyes, according to the affidavit, paid $2,000 in cash for a 1999 Dodge Caravan and used the card to buy $800 worth of tires and wheels.

Department of Revenue spokesman Derrick Gasperini said he could not comment on the case until it is made public when Reyes is arraigned today. But he said it is common for Turbo Tax to issue prepaid debit cards to clients who get refunds using their software.

When the state issues refunds, it typically does so with a check or a direct deposit to a bank account, he said.

The arrest is sure to set off a firestorm of questions about how a tax filer was able to, at least for awhile, get away with such a lucrative scam against an agency that is supposed keep a sharp lookout for improper tax filings.

"They've got some explaining to do to restore the confidence of Oregonians," said Rep. Vicki Berger, R-Salem, who serves as co-chair of the House Revenue Committee. "Is this is an anomaly? If so, let's make sure it never happens again. Or do we have a systematic problem in the way the Department of Revenue treats this and other transactions?"

According to the probable cause statement, Reyes spent $13,000 in Marion County over two days in February, $26,000 in March and more than $35,000 in April.

The statement says the fraud was discovered May 7 by the issuer of the debit card after Reyes reported a "second card" as lost or stolen. It's unclear whether she had already been given one replacement card. Oregon Department of Justice agents arrested Reyes on Wednesday at a Northeast Salem address.

Reyes apparently was caught on surveillance video using the card to make purchases at a number of Marion County businesses, according to the affidavit. She also apparently signed her name on several transactions and provided her address, it said.

The Department of Revenue has come under scrutiny as the state has faced tight budgets the last few years. A series of outside audits and an internal Department of Revenue report found the state could do much more to identify and collect taxes owed. Legislators have ordered agency executives to show how they've become "more effective and efficient."

The department processes about $7 billion in tax returns each year on computer systems designed in the 1980s. In January, the state's chief operating officer, Michael Jordan, pulled the plug on a $100 million computer upgrade that the department said would pay for itself by finding tax cheats.

In 2010, the state reported $559 million in delinquent taxes, mostly from unpaid personal and corporate income taxes. That's the amount the state knew about. Revenue officials estimate that, in 2006, Oregon's personal income tax compliance rate was 81.5 percent -- far lower than other states -- and translating to $1.2 billion in unreported or uncollected taxes that year.

The agency had been without a permanent director for more than a year before Gov. John Kitzhaber appointed longtime employee James Bucholz last month.


1 comment:

Shelly said...

Thanks for sharing, it should be prissined for the long term.. it's good news for the country.

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