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Scamster Ran Identity Theft Scheme From Prison

Michigan Inmate Used Stolen IDs to Bogus Tax Refunds

September 6, 2006

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The digital age enables telecommuting by all kinds of knowledge workers -- unfortunately including those enaged in criminal enterprises.

An inmate at the Hiawatha Correctional Facility in Kinross, Michigan, was sentenced to 5 to 20 years in the Chippewa County Circuit Court by 50th Circuit Court Judge Nicholas Lambros, according to Michigan Attorney General Mike Cox.

Dale Morris, 42, was convicted of maintaining a sophisticated criminal enterprise that he orchestrated from his Michigan prison cell. Morris' scheme enlisted the help of two fellow Michigan inmates, Darius Moye and Richard Custer, their mothers, Mary Moye of Georgia and Linda Custer of Detroit, David Bullard of Inkster, and Sherry Drake of Detroit.

The scheme involved the attempted use of thousands of stolen names and social security numbers, including several hundred stolen from the St. John's Medical System in Detroit, to defraud Michigan taxpayers out of hundreds of thousands of State tax dollars. The hospital records were later seized in Georgia in Ms. Moye's home.

"The sheer brazenness of this criminal enterprise is incredible," Cox said. "It just goes to show that law enforcement always has to be vigilant."

Morris, in prison as a 4th Habitual Offender (convicted of 3 prior felony convictions), was the ringleader of the scheme to obtain Homestead Property Tax refunds that were intended for low income renters.

While in prison, Morris' directed his co-conspirators to file hundreds of false homestead property tax claims with the Michigan Department of Treasury. These fraudulent filings, which used stolen names and social security numbers, claimed to be low-income renters in Detroit.

Hundreds of Michigan Treasury check "refunds" were in the process of being sent to various addresses in Detroit, many of which were non-existent, but all had a change of address form filed with the U.S. Post Office directing the checks to a Livonia P.O. Box. The P.O. Box was rented by Exarch Management Consultants -- which was incorporated by Morris while he was in prison.

U.S. postal carriers noticed the large number of Treasury checks going to the Livonia P.O. Box and alerted authorities. The Michigan State Police, U.S. Postal Inspectors, and the Michigan Attorney General's Office unraveled the scheme quickly and charged all participants with maintaining a continuing criminal enterprise, a 20-year felony, and filing false tax claims, a 5-year felony.

When the defendants were arrested, thousands of additional tax claims were in the process of being filed. Had this fraud continued, the defendants would have defrauded the state of hundreds of thousands of dollars.

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