Tax fraud scheme stole identities, $10 million
CINCINNATI, US - When Kudzaiishe and Julius Marimbire opened a storefront business called Express Refund Center five years ago, they promised customers they’d prepare their taxes for a reasonable fee.
Instead, federal prosecutors say, the two men stole their clients’ identities, filed phony tax returns in their names and collected millions of dollars in fraudulent refunds.
Prosecutors say the scheme eventually grew so large that it involved at least seven conspirators and as much as $10 million in illegal refunds.
Kudzaiishe Marimbire, 34, and Julius Marimbire, 32, are among seven men charged Friday in Cincinnati with participating in the tax fraud scam, which prosecutors say began in 2007 as a small business on Colerain Avenue in Mount Airy and ended with the identity theft of thousands of names.
“In later years, they didn’t operate a tax preparation service,” said Tim Mangan, an assistant U.S. attorney. “They simply operated in wholesale theft.”
U.S. Attorney Carter Stewart said similar schemes are growing in popularity around the country as criminals get more creative – and destructive – in how they use identity theft for profit.
Stewart and other federal officials said Friday that many thieves have created online exchanges, known as “carding sites,” where they can buy, sell and trade personal information for any number of scams.
“Identity theft is a growing threat to American taxpayers,” said Darryl Williams, special agent in charge of the Internal Revenue Service.
In the Cincinnati case, Stewart said, the men involved were so efficient they often filed the phony returns and received refunds before the taxpayers whose identities had been stolen filed their legitimate returns.
The fraudulent return usually was the one processed by the IRS because it was filed first, forcing the unsuspecting taxpayers to contact the IRS and arrange to re-file the correct return.
All of the men indicted Friday have ties to Zimbabwe and prosecutors believe much of their profits were sent to friends and relatives in the African country. They said the men purchased dozens of trucks and luxury cars and shipped them back home, where family members ran a transportation business.
The others charged Friday are: Hlomera Mabhande, 30, Johanes Tagarisa, 37, Kudzaishe Bungu, 26, Tawanda Marimbire, 23, and Andrew Bere, 22.
Only Tawanda Marimbire was in federal custody Friday. He was caught earlier this year trying to enter Canada with $78,000 that he failed to declare to customs.
Bungu is in Cincinnati and is expected to appear in U.S. District Court next week. Federal officials believe the other five men fled to Zimbabwe.
Stewart said Zimbabwe has an extradition treaty with the United States and efforts have begun to bring the men back to face the charges.
All face federal conspiracy and fraud charges that could send them to prison for decades if they are convicted.