Police say Reyes' case could be the biggest tax return scam ever in the state of Oregon.
reports Reyes, 25, allegedly used TurboTax to make a report of $3 million wages on her 2011 personal income tax return. According to an affidavit
obtained by The Oregonian
, she used the software's tax calculator to claim a refund of $2.1 million. According to The Oregonian
, TurboTax issued Reyes a Visa debit card with the full refund amount after the state approved it.
Oregon revenue officials discovered the fraud only after Reyes reported the card was lost. According to NY Daily News
, by the time tax authorities detected the fraud, Reyes had allegedly spent more than $150,000 on purchases, including a car and household items. The Oregonian
reports Reyes paid $2,000 in cash for a 1999 Dodge Caravan and used the card to buy $800 worth of tires and wheels. She spent $13,000 in Marion County over two days in February, $26,000 in March and more than $35,000 in April.
Surveillance video caught Reyes using the card to make purchases at different businesses in Salem. Daily Mail
reports that she even signed her name and provided her address for some of the transactions.
Even though several officials of the Oregon Revenue Department examined Reye's electronic return before her refund was approved, the scam still went undetected. Communications director for the state agency, Derrick Gasperini, said the approval of the massive refund was due to "human error." He said: "Our processing system did flag (Reyes' tax return) for manual review. We manually reviewed it and our internal controls failed. Someone did approve a $2.1 million refund.”
comments that the case will raise questions about tax administration in Oregon. Daily Mail
reports that revenue officials estimate that in 2006, Oregon's personal income tax compliance rate was 81.5 percent. This is far lower than most other states and translates to $1.2 billion in uncollected taxes that year.
Rep. Vicki Berger, R-Salem, Co-chair of the Oregon's House Revenue Committee, criticized the revenue officials. She said: "They've got some explaining to do to restore the confidence of Oregonians. Is this is an anomaly? If so, let's make sure it never happens again. Or do we have a systematic problem in the way the Department of Revenue treats this and other transactions?"
According to NY Daily News
, Intuit, the company that owns TurboTax, has returned $1.9 million to the state.
reports Reyes was booked in the Marion County Jail on charges of computer crime and aggravated theft. She will appear in court on July 5.