Bruce was only a few weeks from retirement after 30 years as
a mail carrier in sunny
He never lived to fulfill his retirement plan of moving back
to a quiet life in the
Instead, he was gunned down on his daily mail route in December 2010 by members of an identity theft ring who stole his master key as part of a scheme to claim fraudulent tax refunds.
Using stolen names and Social Security numbers, criminals are filing phony electronic tax forms to claim refunds, exploiting a slow-moving federal bureaucracy to collect the money before victims, or the Internal Revenue Service, discover the fraud.
Parton was a victim of what officials say has ballooned into a massive, and dangerous, illegal industry that could cost the nation $21 billion over the next five years, according to the U.S. Treasury Department.
While that is a relatively small sum compared to the $1.1 trillion collected from individual tax payers in the last fiscal year, the crime has been growing by leaps and bounds in the last three years.
"We are on the top of a national trend that is causing
a hemorrhage of tax dollars," said
"For whatever reason, we always tend to lead the nation when it comes to fraud," he said, noting that his office has been battling massive Medicare fraud in recent years that has since spread to other parts of the country.
Nationwide, the number of cases of tax identity theft detected by authorities sky-rocketed to more than 1.2 million cases in 2012 from only 48,000 in 2008, according to the Treasury Department.
The real number of phony tax filings is likely much higher as the fraud is hard to track, according to a November General Accountability Office report.
The tax ID theft problem is particularly troubling as, unlike Medicare fraud, it is associated with violent crime and armed gangs.
When agents raided a Howard Johnson in
The suspects had lists of personal information containing more than 1,000 names and confidential personal information, multiple re-loadable debit cards, and records of numerous financial transactions. The investigation revealed that the suspects had been camped out in the hotel room for more than a week filing claims.
Tax identity fraudsters are apparently drawn by the ease of the crime, officials say.
"The scheme is very basic, it works virtually the same in almost every case," said Ferrer. "All they need is your name and the tax ID number."
Armed with that information a refund claim can be filed electronically, making up other details on the form, including addresses, employer data, income and deductions.
Criminals obtain the vital numbers using various tactics, often by bribing office workers with access to personnel files inside companies, as well as large public institutions such as hospitals and schools, according to prosecutors.
Last summer a hacker stole 3.8 million unencrypted tax
records from the South Carolina Department of Revenue in what is believed to be
the largest security breach of a
In December, a former U.S. Marine from
In Parton's case the criminals were after his master key that gives postal workers access to mail drop-off boxes and apartment mailboxes. He was shot twice in the chest by a gunman as part of a plot to steal identities in people's mail for tax refund fraud.
The gunman, Pikerson Mentor, 31, was sentenced last month to life plus 42 years.
More than 600 people turned up for Parton's funeral, including postal workers and people who got to know him on his route. "He had been doing that mail route for 10 years and he always had a smile for everyone," said his daughter, Nina Parton.
The criminals stay under the radar using identities of the elderly or the very young, who are unlikely to be filing for earned income, as well as the deceased. They typically claim small refunds, around $3,000, but use multiple identities, with payments often made to pre-paid debit cards.
The number of
The tax collection agency prevented $20 billion in attempted tax refund fraud in fiscal year 2012, up from $14 billion a year earlier, he said.
"It's one of the biggest challenges that faces the
Despite the increase in investigations, the agency still had a backlog of 300,000 cases of people waiting for legitimate refunds after they were victims of fraud. It takes an average of six months to resolve a case, Miller said.
Electronic filing, which now accounts for 80 percent of returns and was introduced to speed up delivery of refunds, has made the system more vulnerable to fraud.
"We will not be prosecuting our way out of this. That's not going to be the answer. We're going to have to make it more and more difficult for criminals to profit from this behavior," said Miller. "If they're not successful they will move onto something else."