Tax Fraud Led To University Mall Business Boom

TAMPA – Business at a jewelry kiosk in University Mall exploded in September 2011, according to the Secret Service, which says M. Gold and Diamonds can thank the proceeds of tax refund fraud for its new customers.

The federal government is asking a judge to allow it to keep $379,798 seized from a business account believed to contain the proceeds from identity theft tax refund fraud deposited on debit cards. The cards were used to make purchases at the kiosk.

Kiosk owner Aneel Mohammad is not charged with any crime.

The civil forfeiture case raises a question facing local merchants: Should they question purchases made with prepaid debit cards in the face of evidence that the cards are favored by identity thieves who file bogus tax returns?

Mohammad’s lawyer, Michael B. Germain, said Mohammad didn’t know where his customers got their money. “If people were purchasing goods from his store with fraudulently obtained tax refunds, he wasn’t aware of it at the time,” Germain said.

In general, retail advocates agreed merchants can’t be certain they are being paid with fraudulently obtained funds. “We are not aware of any legal requirement for merchants to screen for this, and it’s not clear how that would be possible,” said J. Craig Shearman, vice president for government affairs and public relations at the National Retail Federation.

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