Soukas, 28, currently serving nearly eight years in a federal prison on a number of fraud convictions including identity theft, testified before the U.S. Senate Finance Committee that in a two-year period he filed numerous false returns in a number of names. Despite the different names, Soukas had the returns sent to a single checking account in his name.
Soukas' testimony prompted sharp criticism of the IRS from the panel.
"The tax system is riddled with technological holes. The IRS has a lot of work in front of it," Finance Committee Chairman Max Baucus (D-Mont.) said. Ranking member Chuck Grassley (R-Iowa) added, "It looks like it's easier to defraud the IRS than banks."https://o1.qnsr.com/log/p.gif?;n=203;c=204650394;s=9477;x=7936;f=201801171506010;u=j;z=TIMESTAMP;a=20392931;e=i IRS Commissioner Mark Everson, while complaining of low and delayed funding to the IRS by Congress, told the committee Soukas found a soft spot in the system. "At the margin, we don't go after everyone," he said. "You will not get prosecuted for a $40,000 refund fraud."
Lawmakers were unconvinced.
"If you are corrupt, it's pretty easy to beat the system," Sen. Ron Wyden (D-Ore.) said to Soukas.
"To hijack the personal information of someone is not hard at all," Soukas replied. Social Security numbers are available in many places for a common thief to obtain. The system, in my eyes, is inviting criminals like myself to steal from the IRS."
Soukas' criminal career began in the mid-1990s when he began selling non-existent electronics on various Internet auction sites. Through the personal data obtained from the unsuspecting buyers, Soukas launched his career as an identity thief. By 2000, he fled the country in the face of pending FBI charges.
While in Greece, he discovered the IRS was easy prey for identity-theft scams. Soukas said he saw an online H&R Block advertisement that promised tax returns within days of filing. Using his own personal information and a fake W-2 form, Soukas sent an income tax filing via H&R Block claiming a $3,614 return.
He followed that false claim by successfully applying for an online "anticipation loan" to receive his refund within a few days of the filing. "My first thoughts were that is a really easy way to get money and, if I wanted to, I would be able to hijack other people's identity and never get caught if I were to take the necessary precautions," he said.
For the 2001 tax season, Soukas said he went into "overdrive and quickly started filing false claims to the IRS through numerous Web sites, with other people's personal information that I had used in my past crimes of identity theft."
The IRS paid out only one in four of the false returns filed by Soukas, but he still managed to receive $43,600 in fraudulent refunds. Soukas said he was never questioned on the validity of the claims, even when he called the IRS to inquire about the status of certain returns.
"It doesn't take an Einstein to file false tax claims. It is actually pretty easy," Soukas said. "If I really wanted to continue in this field, I could have safeguarded my true identity and never been caught."