WASHINGTON — It was easy, even for a criminal on the run in Greece, to use
stolen identities to obtain more than $43,000 in fraudulent tax returns,
Evangelos Soukas told lawmakers today.
Soukas, 28, currently serving nearly eight years in a federal prison on a
number of fraud convictions including identity theft, testified before the
U.S. Senate Finance Committee that in a two-year period he filed numerous
false returns in a number of names. Despite the different names, Soukas had
the returns sent to a single checking account in his name.
Soukas’ testimony prompted sharp criticism of the IRS from the panel.
“The tax system is riddled with technological holes. The IRS has a lot of work
in front of it,” Finance Committee Chairman Max Baucus (D-Mont.) said. Ranking
member Chuck Grassley (R-Iowa) added, “It looks like it’s easier to defraud
the IRS than banks.”
IRS Commissioner Mark Everson, while complaining of low and delayed funding to
the IRS by Congress, told the committee Soukas found a soft spot
in the system. “At the margin, we don’t go after everyone,” he said. “You will
not get prosecuted for a $40,000 refund fraud.”
Lawmakers were unconvinced.
“If you are corrupt, it’s pretty easy to beat the system,” Sen. Ron Wyden
(D-Ore.) said to Soukas.
“To hijack the personal information of someone is not hard at all,” Soukas
replied. Social Security numbers are available in many places for a common
thief to obtain. The system, in my eyes, is inviting criminals like myself to
steal from the IRS.”
Soukas’ criminal career began in the mid-1990s when he began selling
non-existent electronics on various Internet auction sites. Through the
personal data obtained from the unsuspecting buyers, Soukas launched his
career as an identity thief. By 2000, he fled the country in the face of pending
FBI charges.
While in Greece, he discovered the IRS was easy prey for identity-theft scams.
Soukas said he saw an online H&R Block advertisement that promised tax returns
within days of filing. Using his own personal information and a fake W-2
form, Soukas sent an income tax filing via H&R Block claiming a $3,614
return.
He followed that false claim by successfully applying for an online
“anticipation loan” to receive his refund within a few days of the filing. “My
first thoughts were that is a really easy way to get money and, if I wanted
to, I would be able to hijack other people’s identity and never get caught
if I were to take the necessary precautions,” he said.
For the 2001 tax season, Soukas said he went into “overdrive and quickly
started filing false claims to the IRS through numerous Web sites, with other
people’s personal information that I had used in my past crimes of identity
theft.”
The IRS paid out only one in four of the false returns filed by Soukas, but he
still managed to receive $43,600 in fraudulent refunds. Soukas said he was
never questioned on the validity of the claims, even when he called the IRS to
inquire about the status of certain returns.
“It doesn’t take an Einstein to file false tax claims. It is actually pretty
easy,” Soukas said. “If I really wanted to continue in this field, I could
have safeguarded my true identity and never been caught.”
Soukas was eventually found in 2005 and sent back to the United States, where
he is serving his time in a federal prison in Victorville, Calif. He was
convicted of conspiracy to commit wire and mail fraud, conspiracy to commit
fraud using another person’s identity and numerous individual counts of I.D.
fraud and submitting fraudulent claims to the IRS.
“What I don’t understand is why doesn’t the IRS have some type of security
measure by issuing a PIN number or even using a mother’s maiden name when
filing electronically,” Soukas said.
Everson told the committee he would “absolutely” look into the idea.
