Cyber criminals are on the loose, stealing money from businesses and consumers and getting away with it!
That’s the standard media line we hear all the time, but in actuality the feds are pursuing and catching a fair amount of crooks and making sure they pay a heavy price.
For Fiscal Year 2022, the Internal Revenue Service’s Criminal Investigation (CI) unit:
- initiated more than 2,550 criminal investigations
- identified over $31 billion from tax and financial crimes, and
- achieved a 90.6% conviction rate on cases accepted for prosecution by the Department of Justice.
IRS-CI touted a handful of high-profile cases, including a substantial hack of crypotcurrency, as a warning to other would-be criminals.
Don’t do the crime if you can’t do the time!
- IRS-CI traced the theft of billions of dollars worth of Bitcoin from Bitfinex, a cryptocurrency exchange, from a 2016 hack that originated in Hong Kong. The criminal investigation bore fruit six years later with the arrest of Ilya Lichtenstein, a Russian-born emigrant, and his wife, Heather Morgan, at their high-rise apartment in lower Manhattan. Both were charged with conspiracy to launder stolen cryptocurrency. Lichetenstein was deemed a flight risk and denied bail. IRS-CI ended up recovering more than 94,000 stolen Bitcoin, the largest such seizure ever. At the time of the theft, the stolen Bitcoin was valued at about $72 million. IRS-CI estimated the market value at approximately $3.6 billion in 2022. The husband and wife went to trial this fall and await sentencing.
- Not all crooks learn their lesson the first time. Michael Dexter Little was convicted for tax fraud crimes in 1999 and 2003. Little’s brief time behind bars didn’t dissuade him from trying again. He filed a series of false tax returns that claimed large but bogus fuel tax credits, in both his name and the names of his identity theft victims. All told, Little obtained at least $12.3 million in fraudulent tax refunds. He and his co-conspirators bought properties with the ill-gotten gains. The good news: IRS-CI kept close tabs on Little and built a solid case against him resulting in a 19 and a half year federal prison sentence for Little. Bonus: He also must repay the $12.3 million stolen.
- Another married couple, Jeff and Paulette Carpoff, got away with running a billion-dollar fraud scheme centered around their company DC Solar. The Carpoffs duped people into investing in DC Solar based on fake financial and engineering reports. The money primarily went toward the Carpoffs buying a minor league baseball team, luxury real estate and a NASCAR racing sponsorship! The feds seized and auctioned off 148 of the Carpoffs’ vehicles to recoup more than $8 million for scheme victims. Result: Jeff Carpoff was sentenced to 30 years in prison, and Paulette Carpoff to 11 years.