Texas AG charges E. Texas tax company with tax fraud, ID theft

Texas Attorney General Greg Abbott (Source: Texas Attorney General's Office)
Texas Attorney General Greg Abbott (Source: Texas Attorney General's Office)
Betty Murphy
Betty Murphy

Texas Attorney General Greg Abbott filed tax fraud and identity theft charges against Syam Tax Services, LLC Thursday. A press release from his office alleged that the company fraudulently obtained elderly Texans' sensitive personal information and illegally falsifying federal income tax returns on their behalf.

"Targeting senior centers and churches, Syam Tax Services launched an apparently well-orchestrated scheme to defraud the elderly - and even worse, those who rely on federal benefits for their well-being," Abbott said in a press release. "My office is working to put a stop to this despicable fraud, and thanks to the court order we obtained today, Syam is prohibited from continuing to violate the law.

The Attorney General's Office informed Texans of the scam in December after an 80-year-old Diboll woman filed a report with the Angelina County Sheriff's Office and made an effort to spread the word, so that no one else would be taken in by the company's fraudulent practices. Abbott said his office is "moving swiftly to shut down Syam's deceptive operation and prevent other seniors from becoming victims of this scam."

According to the press release, which names Syam's officers Shannon Mays and Marshrief Shead as defendants, the Texas Attorney's Office announced that it was investigating Syam Tax Services and cautioning people to avoid getting snared by the defendants' tax fraud scheme.

Among those allegedly scammed by Syam Tax Services was Betty Murphy, of Diboll. In December 2012, she told East Texas News that she knew something wasn't right when the company's representative promised several of their friends that they would receive a federal stimulus check for $600.

In addition, Lufkin residents Jackie Waddelton and Eloise Davis, who had relatives who fell victim to the scams, spoke at a press conference about the charges filed against Syam Tax Services.

On Thursday, Abbott's office filed court documents that explained how Syam "enlisted recruiters to canvass East Texas churches and senior centers, where elderly Social Security or disability recipients could be recruited." The press release stated that when recruiters talked to their victims, they falsely claimed the victims were eligible for "free stimulus money" or "Social Security stimulus.

Then the recruiters told the "stimulus" recipients that they had to provide sensitive personal information like their date of birth, Social Security and bank account numbers, and a copy of their driver's license and sign a form in order to receive their alleged stimulus.

Without the victims knowing about it, Sym employees then prepared and filed fraudulent tax returns on the victims' behalf.

"With the filing of the fraudulent tax return, Syam falsely claimed the victim was entitled to $1,000 or more in refundable tax credits," the press release stated. "Expanding on the fraudulent scheme, Syam built in unlawful profits for itself by directing the Internal Revenue Service to deposit approximately half of the tax refund into Syam's own bank account, while the portion that remained after Syam took its cut went to the victim."

Because there is not a federal stimulus benefit payment for low-income Social Security recipients, when the IRS discovers that the victim is not actually eligible for the tax refund, the federal government holds the victim accountable for paying back the entire amount of the refund, along with any penalties and interest. The press release stated that because victims were unaware that Syam had filed a tax return on their behalf, most victims don't learn that they may be liable for the full amount of the fraudulent refund until they are contacted by the IRS.

"As a result, low-income Texans in the East Texas communities that Syam targeted have been left with a debt to the IRS that they cannot afford to repay, despite the fact that these victims thought they would financially benefit from a federal benefit to which they were told they were entitled."

The press release also stated that the victims face the risk of identity theft as well.

"Based on the results of the investigation so far, state investigators believe that Syam has filed hundreds of fraudulent tax returns, and may even attempt to use the same taxpayer information to file more fraudulent tax returns in future years."

As a result, the Texas Attorney General's Office filed an injunction and asset freeze to keep Syam from continuing to violate state law.

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