Federal investigators have uncovered a multi-billion dollar tax fraud scheme, the Wall Street Journal reports.
Federal authorities are struggling to crack down on what they describe as a widespread scheme that has already likely defrauded the Internal Revenue Service of billions of dollars using the stolen identities of Puerto Rican citizens.
The perpetrators of the scheme, authorities say, swipe the Social Security numbers of Puerto Rican citizens, who don't have to pay federal income tax—and are less likely to be on the IRS radar—and use their information to file fake returns. In some cases, they enlist U.S. mail carriers to intercept the refund checks that are disbursed.
The plot, which includes participants from around the U.S. and Latin America, has been around for at least five years. Prosecutors have obtained multiple convictions but none involving those believed to be among the top players in the operation, according to several people briefed on investigations into the fraud.
Manhattan U.S. Attorney Preet Bharara, who is involved in the investigation, said the evidence uncovered so far could be "the tip of the iceberg … it’s a massive fraud."