and intelligence we figured out are the main players behind these schemes, where are they launching these schemes from? where are they getting their lead lists from? how are they recruiting? how do they organize? where are they moving their money? more and more what we focus on within the justice department and the rest of the federal law enforcement community has to do with sharing information better, faster, coordinating more effectively as the ftc has done very successfully over a number of years but recognizing that fraud has become globalized and particularly when you are targeting seniors with so many different types of scams whether it's lottery scams, inheritance scams, grandparent scams, ultimately we have to move faster, share information faster, and collaborate faster. what i mentioned is one example of what we can do, but it takes that kind of active and sustained cooperation between law enforcement here and in

other countries. >> and that's coordination among law enforcement. there's also the international component of these will affect the kind of messages we will send to consumers, and that's something david would like to talk about, about how the ftc is recognizing the international component of much of their work and how it affects the messaging or the messages they give out to consumers -- well, to consumers. >> let me put this in context. i think there's been a terrific summary of the kinds of scams that are plaguing our older people in the united states, but they pose a real problem, a real challenge both for law enforcement and for consumer education. so let me just sort of run through some of the reasons why that is so. these are retail rather than wholesale scams. one of the keys to the scam typically is getting someone on the phone and having a conversation with them. they may be initiated through the internet. they may be initiated through

the receipt of a fake check, but generally there is one-on-one interaction between the scammer and the victim. second, as jonathan has pointed out, a lot of these boiler rooms are not in the united states. they're in canada, they're in jamaica, they're in ghana. we get these complaints, you know, now even peru and spain show up on our lists in terms of where these kinds of calls originate from. so these are not the boiler rooms in tampa that we can shut down easily. third, a multiplicity of scams. if you want to educate people about grandparent scams, that's one thing. but these scams take multiple forms. they're grandparent scams, lottery scams, sweepstakes scams, they're fake check scams, they're mystery shopper scams. as you multiply the forms the scam takes, you increase the difficulties of doing consumer

ad. so we really have a three-pronged approach to going after these scams at the ftc. first and foremost, of course, we want to stop these scams. we want to close down the boiler rooms. we work very closely with the canadian authorities, the jamaican authorities and others, to try to find these guys and to stop them. we also are trying to go after what we think is the pivot point here. at some point the elderly person needs to send money to the scam artist. and that is the point where we can go after them wholesale not retail. so we have money gram under water, we have western union agreeing to agree to essentially the terms we have in our money gram order. one of the things we have done and is really starting to yield results is we've insisted on really clear consumer ad.

so if you walk into many walmarts today, homefully within a year if you walk into any walmart money gram's principal outlets are in walmart stores. they are under our order. you will see facing you as a consumer a miranda warning. if you think you've won a lottery, guess again. if if you think you're sending money to a relative, call them and make sure. if you think the check you just cashed is a real check, wait a month because it probably isn't. if you've been hired as a mystery shopper, again, sorry, you're out of luck. and training the personnel who actual actually man the desks there to talk to an elderly person who is about to wire money to jamaica or montreal or ghana, why are you send issing this money? and one of the sad parts, and this gets to naomi and what beth were talking about before,

sometimes they have to fight with the person. you didn't win. oh, but here it says i won a million dollars. and there are tragic stories in ultimately they leave the money gram outlet which won't let them wire the money and go somewhere else and send it. which underscores the consumer front. just to echo what he was saying, commonly in these types of scams and i believe dave will know this, in order to ensure the victim they have won, they may receive documents on ftc letter head, on doj letter head, on irs letter head, on federal reserve letter head saying that they've won the lottery in this amount and one of the tactics the government can use is that

there are laws against impercent na impersonating a federal employee. >> one of the things green dot has agreed not to allow basically refunds, getting money in jamaica. we're working now with a store value card can company in order to try to combat this fraud because as important as stopping them going after the scammers, as consumer ad is, the way we'll get real traction here is by going after the money and stopping the flow of the money. >> and that's an important conceptual law enforcement ta tactic a lot of us are using which is what we've been calling a choke point. where can we attk legitimate business to stop the flow of money. we've been talking a little bit about what seem to be

sophisticated frauds overseas, using phones and wires, but the tried and true door-to-door fraud still exists. ten men are still around. they are not selling aluminummo something abby kuzma have been door-to-door fraud that still hams. >> yeah, unfortunately, it still we have seen all of these scams among thereprenting. one of the scams that's very common in our area partly because every year we face a lot of storms which you've all been readg southern indiana, tennessee and illinois. we always get tornadoes. we always get very severe storms with hail, et cetera. there are a group of scammers that will go from door-to-door and from state to state following the storms. we call them storm chasers. sometimes we have a different group of scammers we call

travelers that just come seasonally depending upon what the issues are. in the case of the storm chasers what will happen is they will follow a disaster and they will go door-to-door and say things like, i just repaired your neighbor's roof, and i have some materials left over. be happy to give you a discount on your repair for your house because i have one more day i'm going to be here. if you can decide right now -- so there's always this high pressure sales, the concern for you're going to make a deal we did it for your neighbor. so they're trying to give a number of areas of comfort with respect to, well, i've already about been in your neighborhood, et cetera. and of course we've even seen people get up on the roofs and make damage so that they can ostensibly repair it. a lot of times the insurance company get involved where they talk the person into signing

over their ability to take the money, et cetera. it's a very pervasive thing. we see it every single year and seasonally as well and it's a really big problem. we also see many of the things that you all have been talking about in terms of persons helpers coming into people's homes and taking advantage of elderly persons -- >> i think that's one if you could expand on that because i'm going to go next talking a lot about strangers calling up and it sounds like you're talking about folks who know -- >> this is the opposite of strangers. it can be a family member as we've been discussing, but it can be someone who takes advantage of the situation of being in the home of the individual. we've also seen persons who are committing identity theft, and this is something we warn people about all the time. where you got a repair individual who has come into the home to fix the toilet or fix something in the home and especially elderly people but really any of us don't think about what kinds of personal

information might be lying around in the house while that individual is wandering around affecting the repair. it's one of the things we educate people about, before you have some stranger into your home, be sure to walk around your home especially where they might be and cover up everything. make sure anything that has your personal identification information is taken and put away some place safe. we find that -- and i really appreciated all the research aarp has done because we find education one-on-one to be much more effective with the elderly than anything else. we go all around the state and i would encourage ftc and the federal partners to use the state ag's office. a lot of us do have extensive outreach departments where we go around the state and specifically educate groups of elderly and other vulnerable populations. they listen to us because they think of us as being -- we have

a certain amount of authority because we're the ag in their state, we're the good guys, so we have a bit of trust there and, frankly, it's just harder to reach people with paper. and this is a group, a population where you all have awesome materials on the internet, but they don't use the internet, and they don't look on the internet for information. they don't even know they need the information until you tell them this is what's going on. and we do it annually if not more often. >> abby, in the interest of time -- >> sorry. >> we have to wrap up. i leave with one question which is a natural outgrowth of what you're saying and i'll direct it at david which is some folks don't know to ask or don't know what's out there. one of the things i would like you to comment on very briefly, how do law enforcement learn about frauds? how can folks be more willing to report them and how can we turn around and tell people about things that are happening?

>> well, every other law enforcement agency on the courage of people to step forward. and so one of the things we've been doing is common ground conferences, going all over the k country meeting with consumer groups, legal services, local law enforcement to try to encourage people to reach out. and that effort has yielded enormous dividends because we are getting people who are in the nursing homes or do reach out to provide services to the elderly. >> i think we'll stop on that because that's a really fascinating point as opposed to waiting for people to come to us and the people in the room here can take that as a last message, you can reach out to where folks are. >> get out of d.c. >> well, thank you, folks. thanks for the information. >> good work.

the panelists are to my immediate left sallie cooper, the director of operations from the internal ref thank you service criminal investigation, and to her left is carol ide, the civil criminal coordinator in the tax division of the department of justice. and they're going to talk about, again, common tax scams that consumers and individuals should watch out for as they are preparing to file their tax returns. so, sallie, carol, thank you very much. >> hi. good afternoon. thank you for having me on the panel this afternoon. as mike said, i'm sallie cooper, of operations, policy and support for irs criminal investigation. and one thing we were talking about as we were listening to all the panels is there is a permeation of scams or

commonalities between the scams and every panel that it seems to be presenting today. as far as criminal investigations mission, ci is the investigative arm of the internal revenue service. we support the overall mission of irs but we enforce the criminal statutes relative to tax administration and related financial crimes in order to 0 encourage and achieve voluntary compliance with the internal revenue code. once the investigation is complete we afford a recommendation for prosecution to our partners at the department of justice, specifically we start with the tax division who reviews our work and hopefully authorizes for us to go forward with prosecution and they then in turn refer it over to the respective u.s. attorney's office. and carol is going to give a little bit about her mission. >> the tax division at the justice department does review

all criminal referrals from the internal revenue certificaservi criminal investigative division. our attorneys do a lot of the prosecutions but we really rely on the local united states attorneys to carry the bulk of that water in the criminal. we also have a civil arm, actually more civil attorneys, because, as you know, there's a lot of affirmative tax litigation which actually may be seen as kind of anti-consumer. i've been doing foreclosures for over 23 years so there are a number of people who probably don't like a big part of our mission. but a the civil side a lot of the kind of scams that we'll be talking about today, that sallie will be talking about today. for example, getting injunctions against bad tax return preparers and abusive tax shelter promoters, things like that. so we're working and in

accordance with the attorney general's recent memorandum really pushing parallel investigations and parallel proceedings where we civilly shut down a scam, collect any -- as much delinquent tax and penalties as possible but also investigate and prosecute criminally wherever possible. so we're really pushing those parallel proceedings. >> each yearputting out what we dirty dozen. and what that is is a list of 12 -- of the top 12 scams that are perpetrated against innocent taxpayers. i'm just going to cover a few of them today but topping the list this year is identity theft. and, again, you've heard that mentioned through several presentations and it is becoming so critical to protect your personal information. as was just mentioned on the

previous panel, even having someone in your home you need to be careful what you have laying around. the irs is taking a very proactive look at identity theft. we're sending notices to taxpayers which is sometimes their first notice that their identity has been compromised when we see more than one return being filed and/or we see that a w-2 has been filed in that person's name that has an unknown employer. in january the irs announced where we did a coordinated sweeps week trying to attack this identity theft issue. now anyone that believes that their identity has been compromised, there is an irs protection unit and that can be accessed on irs.0.gov and look

for identity theft. mr. barat out of the u.s. attorney's office in los angeles mentioned identity theft and he also mentioned phishing as well. that's when someone uses e-mail or some other electronic media to try and solicit someone to respond either giving personal identification, giving account information, and for irs it can appear that it is coming from either a legitimate irs inquiry or some related entity. irs will generally not send an initial solicitation or request for personal information to a taxpayer. so that to be a warning sign if you get an e-mail from someone that appears it's irs or appears that it's related to irs, be concerned and don't respond.

either call irs. go to the irs.gov and look for steps to take. once they get your information, again, they can use that for all times of scams. they can use it to file false tax returns. they can use it to obtain mortgage loans. they can use it for all types of things and it's very hard to correct once that happens. >> let me just add with the phishing, the attempts to get personal information from consumers and then what happens is generally these scammers turn around and file some sort of false refund claim. and often, as sallie mentioned, the first notification a victim will have that somebody else has stolen their identity, has gotten their personal information be a filed a bogus claim, when they file their own return and it gets bounced because the irs has already

received what appears to be a legitimate tax return under that individual's social security number. these scammers file tax returns very, very early in the tax season. in fact, most of them are on vacation by now. and, if you're like me, you're just thinking about, oh, yeah, pretty soon i think i need to file my tax return. so, you know, the legitimate folks tend to get really surprised by this late day. we prosecute at justice, the irs has been referring a lot of these refund crimes to the justice department. and we participated in the january push that sallie mentioned. we have since even since november when our deputy attorney general testified before a house committee, since november we've had a ton of very, very strong sentences that for refund crimes that include

an aggravated identity theft count and a lot of these were able to get a restitution component. it's restitution hopefully to victims and sometimes they are not -- not everybody that is involved in a refund crime is necessarily a victim but there's res restitution for innocent victims as well as to the u.s. treasury. collecting that, that's another story. the courts have been pretty receptive to giving res titutio to both categories of victims, both the individuals and the united states. >> thanks, carol. and you made a good point that all taxpayers who are subject to a scam may or may not be victims. the first two, the phishing and the i.d. theft probably there are more victims than part of the scheme. when you're talking about questionable return preparers and you go to a return preparer and you give them your

information, you're ultimately still responsible for what's on that return. and so in 2012 every return preparer needs to have a preparer tax identification number and when they sign that return, they need to enter that return or that number on the return. and let me just say we're focused on consumer fraud but most of the return preparers out there are honest and decent. we're focusing on those ones that are taking advantage of individuals. some of the things you need to watch out for or consumers need to watch out for when they are choosing a return preparer is, one, does the return preparer sign the return and enter their tax identification number? do they give you a copy of the return? because you should always see what has been filed with irs before it is filed. and you should get a copy to sign. are they promising you a larger refund than you thought you

would get? and it goes back to the old adage and somebody mentioned it earlier, if it sounds too good to be true, it probably is. do they base their fee on a percentage of your refund? that's also a clue because that probably means they're inflating your refund in order to increase their fee. do they require you to split the refund with them? and do not ever sign a blank return and then let them fill it in and then mail it in because, again, remember, if you are going to a return preparer to have your return prepared, you are ultimately responsible for what's on that return. and this, too, carol mentioned some injunction earlier and that's one of the mechanisms that are used against fraudulent return preparers. >> right. one of the things we have to keep in mind is that something like 60% of s. taxpayers use a

paid return preparer and as sallie mentioned most of them are good. they've gone through continuing education programs. they have their preparer tax i.d. thumb, and they do a decent job. but it is the ones that are perpetuating fraud and taking advantage of consumers that are the real problem we can deal with that in the federal government two ways. number one is prosecuting them because it is a crime to file a false return. it's a crime to assist people in filing a false statement with the united states, but the other thing we do and can often do much more quickly is get a civil injunction against a bad return preparer. people will get a referral from

the internal revenue service on a bad return preparer, we will talk to several clients, maybe people who have worked with the preparer. get a preliminary injunction, issue a press release right away, and then the community knows we have a bad return preparer or at least a potentially bad return preparer in the community and then seek a permanent injunction. a number of these bad return preparers very quickly say, you know, we give up. we will stop preparing returns. we get a lot of these injunctions by consent. in fact, the u.s. attorney's office in los angeles is doing a fabulous job getting consent injunctions from bad tax return preparers often as part of a prosecution so they are sort of killing two birds with one stone, and what you do with that is you have an incredible

deterrent of fact out of bad preparers and that really is the power of civil injunctions. one of the typical provisions in a civil injunction against the tax return preparer is that, that return preparer note fay all their clients that they have been prohibited from preparing returns and that tax returns they did prepare were false or fraudulent and also provide the internal revenue service with a list of all the clients for whom they prepared bad returns. now what that means is the internal revenue service will go out and find the clients and try to make up the tax law from the original clients. a lot of them are very upset by that but, remember, the goal is to collect the right amount of tax from everyone and a lot of these people are either victims of a bad return preparer or, as

sallie mentioned, a lot of them actually participate in the filing of a bogus return through a bad return preparer. it is a balance there. we do try to collect the right amount of tax through the civil and the criminal proceedings. >> the last one i'll touch on today is what we term free money where people put up fliers and they tied that, hey, come in to us and you can get free money from irs. and this typically targets some of the lower income individuals and the elderly as we just heard about. they charge people for filing their returns and sometimes the returns don't go through but they already have their fees and they're gone with that money. and we have a number of tools and criminal investigation that we use to go out and, "a," identify these taxpayers, "b," to do investigationses, and our goal is to enforce those laws

and ultimately put people in jail that are committing this fraud against the taxpayers and the government to deter that from happening in the future. but just like we're meeting here today and people have been working all day, one of the best preventive measurements is awareness so that we do outreach, go and talk to people so they are aware these scams are going on and hopefully when someone approaches them with something that does appear too good to be true they think twice about it before they commit or turn over money or turn over their identifying information even when you're going out to do your own personal health care or other items the form will ask you for your social security number and other identifying things and i found that because generally my husband is the primary and i never have it, they never come back and ask me for it. they are always able to process

it without that information. so as much as we can give out, as little information you put out in a public venue, the better. any personal information that gets out is vulnerable for someone of a bad purpose to get it and use it for misdeeds whether it's filing a tax return or the other scams you heard about ultimately they're all to make money for somebody who is getting it that it doesn't belong to. as far as irs, if you have any questions or any doubts of any information that you receive especially that is unsolicited, please go to the www.irs.gov website and they have all the official information that has been putbuness. >> and also just a little reminder on the table outside sal yae