Tax scammers grabbed for $700,000

SANTA FE (KRQE) - Bogus tax returns seeking nearly $700,000 in refunds hit New Mexico's tax system over the last month but were caught by fraud investigators.

The 300 false returns marked the second time since last summer that an organized effort had tried and mostly failed to obtain refunds, according to the state Taxation and Revenue Department.

“We put a stop to 96 percent of these false returns before they could be paid out," Taxation and Revenue Secretary Rick Homans said in a statement released by the department. "This should send a strong message to anyone thinking of filing false returns in New Mexico we are watching very closely for fraud activities."

Nineteen of the refunds made it through processing with $32,000 in refunds paid out, he added. The agency is working with the Internal Revenue Service and federal investigators to prosecute the case, Homans said.

New Mexico was one of 25 states targeted by a family ring allegedly headed by Marvin Berkowitz that tried to scam $35 million in tax refunds from 2003 through 2009. The group filed 3,300 false returns using the stolen identifies of federal prison inmates.

Berkowitz fled the United States in 2003 but was extradited from Israel early this year and is awaiting trial in Chicago.