A large-scale fraud operation has led to the theft of millions in IRS refund checks, impacting over 200 taxpayers who were expecting refunds by mail. The stolen checks amount to a total of $3.8 million, according to complaints received by Rep. Nicole Malliotakis (R-NY).
Malliotakis, who represents Staten Island, reported that constituents have been contacting her office with complaints that their IRS refund checks were stolen and fraudulently deposited. One of her constituents had to request a reissued refund check from the IRS four times, with each attempt ending in theft.
One of the more high-profile cases involves Atlanta-based spine surgeon Bennett Grimm. After selling his medical practice, Grimm was expecting a $96,000 refund from the IRS. However, after multiple requests, his checks were stolen and fraudulently cashed, leaving him still waiting for his refund months later.
The IRS has encouraged taxpayers to use direct deposit to avoid the risks associated with mailed refund checks. IRS Commissioner Danny Werfel emphasized that direct deposit is the “fastest and safest” way to receive refunds. However, approximately 10 million taxpayers still opt for paper checks each year, leaving them more vulnerable to theft.
Taxpayers who have lost their checks must submit a formal statement to the IRS, which will then issue a new check through the Treasury Department’s Bureau of Fiscal Service. The process can take up to four months, leaving many taxpayers in limbo as they wait for their refunds.
The rise in check fraud has become a serious issue, with recent cases highlighting the growing trend. In February, two New Yorkers were sentenced to federal prison after stealing a $2.9 million IRS refund check meant for a couple in Texas. Another case in Los Angeles involved a man sentenced to seven years for using stolen checks totaling $2.7 million in a scheme promoted on Instagram.
As more taxpayers fall victim to these fraud schemes, many are calling for increased security measures to prevent further theft and ensure Americans receive their hard-earned refunds.
