Identity theft and tax fraud ring bustedfederal indictment unsealed in Arizona on Thursday.
Daniel David Rigmaiden, 29, of Santa Clara, Calif., was cited in the indictment as ringleader of the operation, which lasted from January 2005 until August 2008. According to the filing, Rigmaiden and his co-conspirators obtained the names and Social Security numbers of deceased individuals and used those identities to file fraudulent income tax returns and obtain the refunds.
During the course of the conspiracy, the group filed approximately 1,900 fraudulent tax returns seeking more than $4 million in refunds, according to court documents. Rigmaiden, a self-professed hacker who went by several aliases – including Stephen Travis Brawner, Travis Rupard, and Patrick Stout – was charged with 35 counts of wire fraud and aggravated identity theft, two counts of mail fraud and one count each of conspiracy and unauthorized computer access.
To conceal their identities, members of the crime ring used approximately 175 different IP addresses to file the returns. An investigation revealed that multiple fraudulent returns were filed from a single IP address in a short period of time, indicating that fraudsters used some sort of automated filing system, according to an affidavit.
The fraudsters set up approximately 172 bank accounts to receive the income tax returns from the IRS via electronic transfers, according to court documents. In addition, defendants shipped packages of money and gold to each other throughout the course of the conspiracy.
“While schemes become more sophisticated over time, fortunately so do our investigative techniques,” Dawn Mertz, special agent in charge of IRS' Criminal Investigation Division, said in a news release. “This investigation serves to remind us there is no such thing as free money and there are no awards or incentives for creativity when it comes to crime.”
An investigation into the case was carried out by the IRS, FBI and the U.S. Postal Inspection Service.
In May 2007, the IRS's Criminal Investigation unit identified a bank account in Phoenix that was receiving fraudulently obtained tax refunds. During an undercover operation that took place from January through April 2008, investigators opened a bank account in Arizona into which Rigmaiden deposited numerous fraudulently obtained tax refunds.
Rigmaiden was arrested August 3, 2008 in Santa Clara, Calif., after a foot and car chase. Searches of his apartment and storage unit turned up fake IDs, equipment to make fake IDs, surveillance equipment, more than $116,340 in cash, and more than $218,000 in gold and silver coins.
Rigmaiden, in federal custody since August 2008, is acting as his own attorney. Each charge of aggravated identity theft comes with a mandatory two-year prison sentence. Each charge of mail fraud and wire fraud comes with a maximum penalty of 20 years in prison. Counts of conspiracy and unauthorized computer access each come with a maximum penalty of five years in prison. Authorities are also seeking a monetary judgment of $5.5 million.
Until late last month, Rigmaiden's case had been sealed by the court pending his consideration of an offer to cooperate with the government, which he subsequently denied.
A co-conspirator, Ransom Marion Carter III, 43, of Phoenix, who was charged with conspiracy, wire fraud and aggravated identity theft, is still currently at large. A third unnamed co-conspirator was arrested in 2008 in Utah and is currently involved in a sealed case.