A Real-Life Tax Scam: This Is What IRS Phone Fraud Sounds Like | KUOW News and Information

A Real-Life Tax Scam: This Is What IRS Phone Fraud Sounds Like

Apr 11, 2016
Originally published on April 14, 2016 1:08 pm

The Internal Revenue Service says it's seeing a surge in phone scams. More than 5,000 victims have been duped out of $26.5 million since late 2013. It's hard to know what exactly con artists are thinking when they target their victims. But now, we know what they are saying.

Before we get started, keep this in mind: The IRS says it doesn't call about outstanding taxes without first mailing you a bill.

Pindrop Security, an Atlanta-based company that investigates phone fraud, recently gave NPR a recording. It's a grueling conversation, more than an hour long, between an active fraud ring and a presumed victim, who is in reality a Pindrop researcher.

Pindrop set up honeypots — dummy phone numbers, some of which are entered into online raffles (win a free iPhone, anyone?) that are run by criminal rings. Pindrop has traced at least 28 fraud incidents to this specific ring.

According to phone metadata, the fake IRS call center is based in a Seattle suburb. But that could just be a proxy. Pindrop researchers say the ring is hard to pinpoint because it has tools to hide the physical location and the money trail.

While the recording is a little hard to understand at times, it clearly illustrates how these scams, on a hunt for quick cash, exploit everyday resources like MoneyGram or Wal-Mart — and people's deepest fears.

Below are five key parts of the recorded conversation between the fraudsters, posing as IRS agents, and the target, who is secretly a Pindrop researcher.

1. IRS Call Center

An unidentified "IRS" man speaks with "Emma Lauder" — a covert Pindrop researcher whose real name we cannot disclose because that would blow her cover.

The agent tells Emma Lauder that his office has audited her taxes — from 2009 to 2014 — and there's been a miscalculation. She owes money. The local authorities with an arrest warrant will come to her home any minute now. Her property will be seized, and she faces federal imprisonment of up to five years.

This is not a fun call to get. But the punch line is how much she owes: $1,986.73. All of these threats are for an amount less than $2,000.

2. Pay In Cash

The call center operator wants cash. And he guides his target through what is clearly a routine drill, playing on fear and secrecy. He warns her to not disclose to anyone at work — not her boss, not anyone — that she is in trouble.

3. At The ATM

The fraudster tells the target that the federal government accepts only Western Union or MoneyGram and that she must pay at Wal-Mart.

Lauder asks a clever question about how much cash, exactly, she should withdraw from the ATM, given that the machine gives only $20 bills and the amount she owes is specific to a cent.

The agent's response is, "Whatever, miss. It's OK. Just take $1,980 or something like that."

4. Confirmation

She is told to make the payment to a man named Gabriel Porter in Boston.

5. Getting Ugly

The tone of the call really changes — from helpful to cruel — when the target confirms payment. She asks for a receipt and a few of the so-called IRS agents begin to taunt her.

This section gets creepy. One man tells her "You can, you know, take a bath. Relax. Relax. Cold water. Cold water." They refer to her private parts and tell her to go look in the toilet, find the receipt there.

WARNING: The following audio contains offensive language.

A Takeaway

If you get a strange message, one way to handle it is to not hand over information right away. Hang up and call the IRS directly at 800-829-1040.

Copyright 2017 NPR. To see more, visit http://www.npr.org/.

ARI SHAPIRO, HOST:

Tax season is here. The filing deadline is next Monday. This year, tax day is the 18th, not the 15th. And when tax season heats up, so does scam season. NPR recently received a recording - a real-life phone call between a woman in Atlanta and a man in a call center claiming to be with the Internal Revenue Service. NPR's Aarti Shahani recaps their peculiar conversation.

AARTI SHAHANI, BYLINE: It's a little hard to understand at times.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED MAN #1: All right, Miss, can you please confirm your first name?

SHAHANI: An unidentified IRS man wants her name.

(SOUNDBITE OF ARCHIVED RECORDING)

EMMA LAUDER: OK. My name is Emma Lauder.

SHAHANI: The agent tells Emma Lauder that his office has audited her taxes from 2009 to 2014, and there's been a miscalculation. She owes money.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED MAN #1: OK, for that reason, the local authorities with an arrest warrant will come at your place.

SHAHANI: And she's going to be arrested - could be any minute now.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED MAN #1: Everything under your name - your property, your bank account - everything will be seized, OK?

SHAHANI: And...

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED MAN #1: And you also face a federal imprisonment for up to five years.

SHAHANI: This is not a fun call to get. The punchline is how much she owes.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED MAN #1: The total finance outstand on your name is $1,986.93, OK?

SHAHANI: All of this, from the audit to her arrest warrant - all these threats over less than two grand? Now, Emma Lauder is not really Emma Lauder. She's a researcher with Pindrop, an Atlanta Company that investigates phone fraud. We can't give her real name, as that would blow her cover. Pindrop set up honeypots - dummy phone numbers. some entered into online raffles - win a free iPhone, stuff that's run by criminal rings. Pindrop has traced at least 28 fraud incidents to this ring.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED MAN #1: Yes. Do you want to resolve this case outside the courthouse, or do you want to go and fight with IRS in a courthouse?

SHAHANI: According to phone metadata, the data call center is based in a Seattle suburb. But that could just be a proxy. Pindrop researchers say the ring is hard to pinpoint because they have tools to hide the physical location and the money trail.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED MAN #1: I said this is a federal case, so we don't accept any checks or credit card or debit card, OK?

SHAHANI: The call center operator wants cash, and he guides his target through what is clearly a routine drill playing on fear and secrecy.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED MAN #1: You see, Miss, do not disclose to anyone else, to your boss or to anyone else, OK?

SHAHANI: He tells her the federal government only accepts Western Union or MoneyGram and that she must pay at Walmart. The tone of the call really changes from helpful to cruel when she confirms payment. She asks for a receipt, and another so-called IRS agent - he gives this response.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED MAN #2: You can, you know, take a bath and relax.

LAUDER: OK, but...

UNIDENTIFIED MAN #2: Relax, OK? Take a bit of cold water, you know?

LAUDER: Yeah, but...

UNIDENTIFIED MAN #2: Cold water.

SHAHANI: It's creepy. They refer to her private parts and tell her to go look in the toilet.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED MAN #3: I have your address.

UNIDENTIFIED MAN #2: When you go to toilet, the letter will come out from the toilet.

SHAHANI: The real IRS says it's seeing a surge in phone scams with more than 5,000 victims since late 2013. If you get a strange message, one way to handle it is, don't hand over information right away. Hang up and call the IRS directly. Aarti Shahani, NPR News. Transcript provided by NPR, Copyright NPR.