According to an annual report released by the Criminal Investigation Division of the IRS, the agency uncovered $2.3 billion in tax fraud and $8.4 billion in other financial crimes, for a total of $10.7 billion in criminal activities during the 2020 fiscal year. This is a significant increase from 2019 when the agency reported it uncovered a total of $6.2 billion in fraud and financial crimes.
Now in its 101st year of publication, the annual report chronicles major take-downs that occurred throughout the U.S. between October 2019, when the 2020 fiscal year began, and Sept. 30, 2020. During this period, the division initiated 1,598 cases, executed 1,226 warrants, and achieved a conviction rate of 90.4%.
For the 2020 fiscal year, the division’s activities were focused on COVID-19-related fraud, cybercrimes and other tax-related crimes. The division also investigated non-tax-related crimes like money laundering and narcotics trafficking, along with a special investigation into the dark corners of the internet.
The report offers detailed accounts of a number of IRS investigations. For example, the IRS found terror groups based in the Middle East that are targeting American first responders to raise money by offering bogus personal protective equipment with an online scam. ISIS allegedly used a website as a front for peddling fake N-95 masks to target hospitals, nursing homes and first responders. Investigators found that terrorists from al-Qaeda and Hamas used social media and cryptocurrency to raise money for weapons and operations. U.S. authorities seized $2 million and over 300 cryptocurrency accounts in what was described as the biggest case of its kind.
Another investigation cited in the report involves five individuals accused by Georgia federal prosecutors of attempting to steal $4.1 million from the Paycheck Protection Program (PPP). The individuals were charged with conspiracy to commit bank and wire fraud, bank fraud, wire fraud, making false statements to a financial institution, and money laundering. At the time of their arrests, authorities seized a car and jewelry valued at $225,000, and over $3 million from ten bank accounts.
Key areas of IRS investigations covered in the report include:
Tax crimes: general tax crimes, abusive tax schemes and identity theft.
Cyber crimes: subjects using the internet as an essential means to commit crimes, remain anonymous, elude law enforcement, and conceal financial transactions, ownership of assets, or other evidence.
Non-tax crimes: tax-related crimes, money laundering, and currency violations including individuals who receive income from illegal sources, such as embezzlement, bribery, and fraud.
Narcotics, counterterrorism, and transnational organized crime: criminal violations of the Internal Revenue Code, Bank Secrecy Act and Federal Money Laundering statutes to uncover crimes involving financing terrorism, narcotics trafficking, and money laundering.
The report also includes an appendix with detailed information on investigations initiated, prosecution recommendations, indictments, sentencing, and incarcerations organized by type of crime for 2018, 2019, and 2020.
The Socure Solution
Socure powers identity verification systems for more than 350 customers including four of the top five banks, eight of the top 10 card issuers, and over 100 of the largest fintech companies such as Varo Money, Public, Chime, and Stash.
Our customers rely on the Socure ID+ platform to reduce identity and synthetic fraud, verify documents and meet compliance requirements, including KYC/AML, using trusted online, offline, and social media data.
Socure products include:
Sigma Fraud Score: achieves superior performance and accuracy by reducing fraud for online new account openings up to 95% with false positives of better than 1:1
Synthetic Fraud: Socure’s newest module, auto-capturing over 90% of synthetic fraud in the riskiest 3% of users, for both new and existing accounts
DocV: new, fully automated omnichannel document verification service, can be implemented right at onboarding or as a step-up mechanism
Email risk, phone risk, and address risk correlation scores: verify email, phone and address match and belong to the presented identity
KYC Solution and Watchlist Screening with Monitoring, the most advanced KYC solution in the market, delivers 90% auto-approval rates or higher on average
To learn more about how Socure can improve your fraud detection program, contact us at salesinfo@socure.com or request a demo.
Aaron Lowe is a Senior Director of Product Marketing at Socure, a leading provider of machine learning and artificial intelligence technologies that provide digital identity trust at Day Zero and beyond. An industry expert, Lowe owns product marketing for Socure's market-leading compliance suite as well as its physical document verification solution, DocV. Prior to Socure, Aaron worked in advertising, marketing, and financial technology for companies including Oracle and Collibra.
Socure is the leading platform for digital identity verification and trust.
Its predictive analytics platform applies artificial intelligence and machine learning technology with trusted online/offline data intelligence from email, phone address, IP, device, velocity, and the broader internet to verify identities in real time.
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