Justice Department Nails Fraudsters Who Exploited IRS Data Breach

The Internal Revenue Service, embarrassed last year when hackers breached its website’s “Get My Transcript” tool for taxpayers, has now helped law enforcement obtain convictions of fraudsters who exploited the tool to collect unmerited tax refunds.

On Friday, the Justice Department announced that an Austell, Ga., husband and wife, Anthony Alika, 42, and Sonia Alika, 27, had pleaded guilty to one count of conspiracy to commit money laundering (the husband) and one count of illegally structuring cash withdrawals to get around bank reporting requirements (the wife).

“With the number of stolen identity refund fraud victims increasing at an alarming rate, the Justice Department, working with the IRS and its other federal, state and local law enforcement partners, remains committed to investigating these abusive schemes and criminal networks, prosecuting these offenders, and seeking lengthy prison terms and monetary penalties,” said acting Assistant Attorney General Caroline Ciraolo. “The investigation and successful prosecution of these defendants sends a clear message to those individuals engaged in, or considering, this criminal conduct that the Department will bring all available resources to bear to hold them accountable.”

The breach of the Get My Transcript tool used by many taxpayers to retrieve past returns prompted the tax agency to form a partnership with private sector and state interests to better protect against such hacking.

 “The IRS is committed to working with our law enforcement partners to pursue identity thieves, and we continue to make important progress in Georgia as well as elsewhere across the country,” said IRS Commissioner John Koskinen. “The IRS is also continuing to strengthen its operations and working with state revenue departments and the tax industry to provide further protections for taxpayers against identity theft.”

The local U.S. Attorney John A. Horn said the department is also boosting resources to combat identity theft.

The Alikas were charged in January with laundering the proceeds from a stolen identity refund fraud scheme.  Allegedly working with Rapheal Atebefia, 33, of Austell, they obtained means of identification of actual individuals, including their names and social security numbers, and used this information to access the IRS “Get Transcript” database.  The indictment further alleged that Anthony Alika, Atebefia, and others obtained prepaid debit cards from stores located in multiple states, registered the cards in the names of the stolen identities, filed false income tax returns using the stolen identities and information obtained from the Get Transcript database, and directed the IRS to deposit the tax refunds onto these cards. 

To conceal their fraud, Anthony Alika, Atebefia and others in 2015 were alleged to have used the prepaid debit cards to purchase money orders, which Anthony Alika, Sonia Alika and Atebefia deposited into bank accounts and then structured cash withdrawals of less than $10,000 in order to prevent the bank from filing Currency Transaction Reports, Justice said. 

Sonia Alika admitted as part of her guilty plea that between February and June 2015, she withdrew more than $250,000 from multiple bank accounts she controlled in amounts less than $10,000.

U.S. District Judge Thomas W. Thrash Jr. will sentence the two on July 27. The husband faces a statutory maximum sentence of 20 years in prison, and the wife a statutory maximum sentence of 10 years. They also face substantial monetary penalties, restitution and forfeiture.

Their alleged accomplice, Atebefia, in March pleaded guilty to one count of money laundering and is scheduled to be sentenced on June 22, Justice reported.

Justice commended the special agents of IRS-Criminal Investigation and the U.S. Postal Inspection Service, who investigated the case, along with and Trial Attorneys Michae Boteler and Charles Edgar Jr. of Justice’s Tax Division and Assistant U.S. Attorney Brian Pearce of the Northern District of Georgia.