IRS insight on crime
When 1930s gangster Al Capone was convicted of tax evasion, he was quoted as saying: “This is preposterous. You can’t tax illegal money.”
With the diligence the FBI showed in its money laundering and tax evasion probe at South Lake Tahoe, the Internal Revenue Service Criminal Investigations team has made a mission out of proving Capone and others who have followed in his footsteps wrong.
No matter what the source, all income earned – whether legal or illegal – is taxable and has the potential of becoming involved in crimes that fall within the investigative jurisdiction of the special IRS CI team.
CI agents step in to enforce the tax and money laundering laws, often finding themselves at the door of the drug kingpin, fraudulent telemarketer, money launderer or corrupt individuals sometimes working the white collar crime with the same dedication as professionals in the upper echelons of society.
“It all boils down to greed and (their) refusing to conform (to) the laws we have,” IRS CI spokesman Mark Lessler said from his Oakland office.
Since the team came on the scene in 1919, tools of the trade have helped work these federal financial crimes.
The Bank Records and Foreign Transactions Act of 1970 and Anti-Drug Abuse Act of 1986 require banks and financial institutions to become involved by filing Currency Transaction Reports and other forms designed to weed out suspicious activity. Patterns are spotted in this process.
The Money Laundering Control Act of 1988 gave CI additional seizure jurisdiction in narcotics-related, money laundering investigations.
Sometimes beginning with a simple piece of paper, the partnerships have netted testimonies from bank tellers and results that add up.
According to 1999 figures, the IRS worked more than 2,000 cases. From those, 1,700 prosecutions were recommended, 1,600 indictments were filed and 900 sentences were handed out as a result of its money laundering investigations. Some are tax evasion cases.
What does it take?
“It takes a creative investigator – part cop, part investigator,” Lessler said, adding how the criminals seemed to have gotten smarter in circumventing the laws.
Each case commands a different approach. Sometimes the direct approach, in which the suspect is confronted first, works.
“We want to get the person to make an explanation first because the minute we go to the next-door neighbor and the associates, you’ve put it out there,” Lessler said. “There’s nothing like going directly to the horse’s mouth.”
How do you know when it’s the right time to confront the person?
“It’s subjective. It depends on the kind of case. If you have enough evidence of a criminal act, it may be the right time to seek an arrest warrant,” he said.
Yet, there are cases like those involving drug trafficking in which conducting interviews on the periphery works better.
Despite how the IRS has encountered character assassinations on a regular basis, the government watchdog agency gets the help it needs.
“Yes, we get tremendous cooperation,” Lessler said.
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