Financial Crimes: Moving Money Using Prepaid

ERAD AdminPayment Card Fraud

Arlene Hauben, Prepaid Press, May 2014

Stolen identity fraud is one of a number of financial crimes that continues to be a big problem for the average citizen and government. A retired senior in Florida, Jerry Z filed his tax return in 2011 and was expecting a $9000 refund, until his accountant called to tell him the refund was denied.

“Someone else had already filed a tax return in my name, using my social security number, and gotten a refund. It took me two years to straighten out the fraud,” said Jerry. “Even after the IRS gave me a special code to file the following year, it took two years to straighten out the mess and get my refunds from the previous year and current year.”

A government report released last November said the IRS issued nearly $4 billion in fraudulent tax refunds over the previous year to thieves who were using other peoples’ personal information. The stolen information, lifted from receipts in stores and restaurants, from snatched bank checks, and theft via the internet, is sold to criminal rings that then use social security numbers and bank account numbers to steal funds illicitly.

To the chagrin of prepaid providers, criminals have figured out the value of prepaid access for their global money laundering activities. Prepaid cards have become a regular conveyance for moving stolen money into bank accounts around the world.

Assistant Special Agent in Charge (ASAC) John Tobon, with Homeland Security Investigations in Miami, said that prepaid cards are a way for criminals to move money and access money before law enforcement can trace it.