U.S. GOVERNMENT PUBLISHING OFFICE

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S. HRG. 114–866

CATCH ME IF YOU CAN:

THE IRS IMPERSONATION SCAM

AND THE GOVERNMENT’S RESPONSE

HEARING 

BEFORE THE

SPECIAL COMMITTEE ON AGING

UNITED STATES SENATE

ONE HUNDRED FOURTEENTH CONGRESS

FIRST SESSION

WASHINGTON, DC

APRIL 15, 2015

Serial No. 114–04

Printed for the use of the Special Committee on Aging

( 

Available via the World Wide Web: http://www.govinfo.gov
(II) 

SPECIAL COMMITTEE ON AGING

SUSAN M. COLLINS, Maine, Chairman

ORRIN G. HATCH, Utah

MARK KIRK, Illinois

JEFF FLAKE, Arizona

TIM SCOTT, South Carolina

BOB CORKER, Tennessee

DEAN HELLER, Nevada

TOM COTTON, Arkansas

DAVID PERDUE, Georgia

THOM TILLIS, North Carolina

BEN SASSE, Nebraska

CLAIRE MCCASKILL, Missouri

BILL NELSON, Florida

ROBERT P. CASEY, JR., Pennsylvania

SHELDON WHITEHOUSE, Rhode Island

KIRSTEN E. GILLIBRAND, New York

RICHARD BLUMENTHAL, Connecticut

JOE DONNELLY, Indiana

ELIZABETH WARREN, Massachusetts

TIM KAINE, Virginia

PRISCILLA HANLEY, Majority Staff Director

DERRON PARKS, Minority Staff Director
(III) 

C O N T E N T S 

Page 

Opening Statement of Senator Susan M. Collins, Chairman .............................. 1 

Opening Statement of Senator Claire McCaskill, Ranking Member ................... 3 

PANEL OF WITNESSES

PANEL I

Al Cadenhead, Ph.D., Senior Pastor, Providence Baptist Church ....................... 5 

Jason Moore, Detective, Auburn Police Department ............................................ 7 

PANEL II

Julie Brill, Commissioner, Federal Trade Commission ........................................ 22 

Alysa D. Erichs, Special Agent in Charge, Homeland Security Investigations

Miami, U.S. Immigration and Customs Enforcement, U.S. Department of

Homeland Security ............................................................................................... 24 

APPENDIX 

PREPARED WITNESS STATEMENTS

Al Cadenhead, Ph.D., Senior Pastor, Providence Baptist Church ....................... 37 

Jason Moore, Detective, Auburn Police Department ............................................ 40 

Julie Brill, Commissioner, Federal Trade Commission ........................................ 47 

Alysa D. Erichs, Special Agent in Charge, Homeland Security Investigations

Miami, U.S. Immigration and Customs Enforcement, U.S. Department of

Homeland Security ............................................................................................... 58 

STATEMENTS FOR THE RECORD

Jason Moore, Detective, Auburn Police Department, Exhibit 1 .......................... 69 

Jason Moore, Detective, Auburn Police Department, Exhibit 2 .......................... 71 

(1) 

CATCH ME IF YOU CAN:

THE IRS IMPERSONATION SCAM

AND THE GOVERNMENT’S RESPONSE

WEDNESDAY, APRIL 15, 2015

U.S. SENATE,

SPECIAL COMMITTEE ON AGING, 

Washington, DC.

The Committee met, pursuant to notice, at 1:34 p.m., Room 562,

Dirksen Senate Office Building, Hon. Susan M. Collins, Chairman

of the Committee, presiding.

Present: Senators Collins, Heller, Cotton, Perdue, Tillis, Sasse,

McCaskill, Gillibrand, Donnelly, and Kaine.

OPENING STATEMENT OF SENATOR

SUSAN M. COLLINS, CHAIRMAN

The CHAIRMAN. The Committee will come to order. Good afternoon.

Today, our Committee continues its fight against the fraudsters,

swindlers, and con artists that plague America’s seniors. Our hearing this afternoon will focus on the IRS impersonation scam. We

will examine how the scam works, what seniors can do to keep

from falling victim to it, and what law enforcement is doing or is

not doing to stop it.

The Treasury Inspector General for Tax Administration has

called this scam the largest, most pervasive impersonation scam in

the history of the IRS. According to the Inspector General, more

than 434,000 Americans have been targeted by scammers impersonating IRS officials. Thousands of citizens have been defrauded

of millions of dollars. The IG estimates that 10,000 IRS impersonation scam calls are placed each week.

As we will hear from our witnesses in greater detail in a few

minutes, the scam often starts with a call like the one I am about

to play, which was provided to us by the police department in Auburn, Maine, so if we could listen to the call.

[An audio recording was played.]

A rather ironic ending there.

Victims are told that they owe back taxes and will be arrested

or, in some cases, deported if they do not pay up immediately. They

are then instructed to purchase prepaid debit cards at local retailers, to load those cards with cash, and to read the PIN numbers

on the back of the cards to the fraudsters. Armed with these PIN

numbers, the fraudsters then transfer the money to their accom-
2 

plices and wipe the cards clean of value. Scammers are also known

to use wire transfers to steal money from their victims.

These methods are typical of the other scams that our Committee

has investigated, but the IRS impersonation scam artists have

added a pernicious twist. They are pretending to be government officials working for the IRS, a Federal agency that, frankly, makes

most Americans apprehensive. When they get their victims on the

phone, they warn them not to hang up, and if the call is terminated, a different scammer impersonating a local law enforcement

official calls back immediately and threatens the target with arrest.

As best we can tell, many of these calls originate in boiler rooms

in India, but the scammers use Voice Over Internet Protocol technology to spoof the caller ID to make it appear that the calls are

being placed by the IRS or even local law enforcement, so when the

unsuspecting victims see the Internal Revenue Service or the local

police department pop up on their caller ID, they are terrified and

easily hustled into doing whatever the scammers demand.

We have an excellent panel of witnesses today. First, we will

hear from one of the victims, Pastor Al Cadenhead, who was defrauded of some $16,000 in just seven-and-a-half hours, and Pastor,

I want to tell you how much I appreciate your willingness to come

forward and tell your story publicly. You are going to save a lot of

other people from going through what you did.

I am also delighted to welcome Detective Jason Moore of the Auburn Police Department in Auburn, Maine. Detective Moore will

describe a case he handled just two weeks ago involving a constituent of mine who was defrauded out of $23,000. Detective

Moore and his colleagues took quick action to stop the transfer of

the victim’s funds to the scammers and they were able to recover

$11,000, so I congratulate him and the Auburn Police Department

for their effective work.

I also want to welcome on our second panel Alysa Erichs, the

Special Agent in Charge of the Miami Field Office for Immigration

and Customs Enforcement. Ms. Erichs’ office helped to prosecute

and convict two individuals involved in the IRS impersonation

scam, and for this good work, they also deserve our thanks.

Finally on the second panel, I want to welcome FTC Commissioner Julie Brill. The FTC plays an important role in educating

consumers about how to better protect themselves from these scam

artists. 

Before I close my remarks, I want to note publicly my disappointment that the Department of Justice declined the Committee’s invitation to testify before us today. As I noted at the outset of my remarks, thousands of Americans have been victimized by IRS impersonation scammers and 10,000 new scam calls are being placed

each week. Actually, the number of victims is greatly understated

because we know from previous experience that it is just the tip

of the iceberg, that many victims are too embarrassed to come forward or they still do not realize that they have been taken.

Yet, despite all of this harm, it appears that the Department of

Justice has prosecuted just three IRS impersonation con artists in

the entire country, two of which were done in the case we will hear

about in the second panel, and these were not even the criminal

masterminds running the scams. They were low-level operatives.
3 

I simply do not understand the Department’s apparent indifference, and its refusal to testify before this Committee is completely

unacceptable. I am left to conclude that the Department does not

want to be held accountable or answer questions about its poor

record. 

There seems to be a pattern of lax enforcement by the Department of Justice when it comes to pursuing the various scams targeting seniors. If the Department contends that it does not have

the tools or the resources it needs to protect American citizens

against these scams, it ought to be working with us to get those

tools, not refusing to testify.

After all, there are really only two remedies to these kinds of

scams. One is educating the consumer so that the consumer can

avoid becoming a victim, and second is going after the con artists

and putting them in prison. That is a tremendous deterrent to others who would try to rip off our seniors and other citizens.

I do want to thank those witnesses who are appearing before us

today and I look forward to their testimony.

Senator McCaskill.

OPENING STATEMENT OF SENATOR

CLAIRE MCCASKILL, RANKING MEMBER

Senator MCCASKILL. Thank you, Chairman Collins.

With many Americans focused on their taxes today, this is a

great opportunity to call their attention to this scam that is sweeping the Nation. This impersonation scam does not discriminate. We

have seen a wide range of people targeted, from the young to the

old, and it does not matter where you work or where you live.

The Inspector General for the IRS has received threatening calls,

so too, have many Members of Congress. It seems that virtually everyone you talk to these days has either gotten one of these calls

or knows someone who has.

It is easy to fall for this. To many victims around the country,

you should not be ashamed of what happened to you. All of us have

a natural fear of the IRS. It is in our DNA as Americans. I appreciate the bravery of someone like our witness, Dr. Cadenhead, who

is stepping forward in hopes others can learn from his painful experience. It is easy to see why he and thousands of others have fallen for this. The IRS is an agency that does strike fear into Americans’ hearts, and many are scared of both the tax code and its complexity and the agency itself, so when they receive a threatening

call from what appears to be a 202 area code, it is no wonder that

many people believe what they are hearing.

I am going to say something to the American people that should

warm their hearts. If you get a call out of the blue from the IRS,

do not answer it. Let it go to voice mail. Pick up the phone and

hang it up. The IRS has told us very clearly that they only use the

telephone as a last resort after sending multiple notices via mail,

their preferred method of communication.

Furthermore, the IRS is never going to dictate a method for you

to pay what you owe, so if you, for some reason, find yourself on

a phone call with someone purporting to be an IRS agent demanding you send money through a debit card or a credit card without
4 

giving you an option on how you want to pay, that should be another red flag.

Frankly, you should not even engage these people. If you are concerned that your call could be legitimate, call our Committee’s

fraud hotline to check it out. Call your Member of Congress. Call

the FTC. Call the Inspector General at the Treasury Department.

Or, call the IRS and talk to the IRS about the call you have received.

The FTC tells us this is one of the few scams where consumer

education can, in fact, make a real difference, that once people

know the IRS is not going to be calling them, these fraudsters will

end up moving on to something else because this will no longer be

a worthwhile endeavor.

I certainly hope so, because right now, the agency has generally

seen more and more IRS impostor scam complaints every month.

We are almost halfway to the number of complaints we got in all

of 2014 and we are only through the first quarter of 2015. Whether

more people are complaining because they are aware this is a scam

or whether more people are actually being targeted is unclear, but

we know we need to do something about it.

The Better Business Bureau of Southwest Missouri estimates

hundreds of people have been called there and are calling this scam

an epidemic. In 2014, FTC reports receiving more calls from Missouri about impostor scams than all other types of fraud except for

debt collection, and the stories they have collected are heartbreaking.

One woman lost $15,000 after a man claiming to be an IRS agent

threatened to arrest her and threatened a lien on all of her assets

and a threat to notify her employer. Another woman detailed an 8-

hour ordeal during which she handed over more than $16,000 to

these criminals.

I am eager to hear from the FTC and law enforcement today

about what they are doing to go after the fraudsters and to alert

the public, and I thank Chairman Collins for bringing this to the

attention of the American people by holding this hearing.

Let me also say that I share the Chairman’s disappointment

about the Department of Justice not being here today. Let no one

think there is a dime’s worth of difference between the Chairman

of this Committee and the Ranking Member about the refusal of

agencies of this government to participate in oversight hearings.

There is no good excuse to not participate in an oversight hearing.

I will just say this to any agency in the future who thinks it is

a good idea to ignore an invitation to come to this Committee in

front of this Chairman. I know her. This does not mean she will

go away, and by the way, I have got her back. I will not go away,

so let the word go out that it is a bad idea to avoid a hearing in

the Aging Committee when we are trying to get at solutions for a

problem that is painful, real, and impacting innocent Americans all

over this country.

Thank you, Madam Chairman.

The CHAIRMAN. Thank you very much for such a strong statement.

I am delighted now to call on our first witness, who is a constituent of Senator Tillis, Dr. Al Cadenhead, who is the Senior Pas-
5 

tor at the Providence Baptist Church in Charlotte, North Carolina.

Thank you so much for being here.

Senator Tillis, if you have any words of welcome for your constituent, feel free.

Senator TILLIS. I just hope we have been taking care of you since

you have been here a little bit earlier. Thank you for traveling up,

and we really do appreciate you coming forward and sharing your

story. I think it is critically important. We need more to do it.

The CHAIRMAN. Thank you.

STATEMENT OF AL CADENHEAD, PH.D., SENIOR PASTOR,

PROVIDENCE BAPTIST CHURCH

Dr. CADENHEAD. Madam Chairman, I am going to stick pretty

close to my prepared text. As a Baptist preacher, I am not known

for brevity, so I will stick close to that and try to move as quickly

as possible and then absolutely entertain any question that you

might have.

On October 28, 2014, I received a voice mail on my cell phone

from a woman who identified herself as an agent for the Internal

Revenue Service. In this voice mail, she said that I was being

charged with tax fraud for serious miscalculations on tax returns

from 2008 to 2011 and that I should return the call immediately

or have my attorney contact them. She further stated that they

were contacting the local authorities.

Assuming that it was a legitimate message, I returned the call

at approximately 8:30 a.m. The woman indicated that I was in serious trouble and the charge of tax fraud was due to my not responding to numerous attempts to contact me, that they had actually left

a letter on my front door. She said they had a photo of an agent

placing an envelope on my door with a letter requesting that I contact the IRS immediately. I asked if I might see the photo. She

said, no, because it will be used in court against me.

She told me that I should not interrupt her for any reason and

that I should be taking notes of the conversation. I indicated that

I was driving and could not write. She told me to find a place to

pull over. I pulled into the parking lot of a school on my way to

my church office.

She proceeded to tell me that they were issuing a warrant for my

arrest, that they were placing a lien on my house and freezing my

accounts because I had failed to cooperate. She also said that they

would be notifying the local media about the arrest. This prompted

enormous anxiety for me because so much of my role depends on

my public image, and also I planned to retire in six months then,

which is now only two weeks away, and certainly did not want to

embarrass my church.

When I said I would like to contact my accountant, she told me

that that would not be a good idea because the miscalculations

were so blatant that the court would likely take his license from

him, and she told me not to interrupt her and began to describe

the court costs that I could anticipate.

When I asked if I could then correct the miscalculation and pay

the amount, she told me that it was $4,900, and I said, may I pay

that? She said, let me refer you to my supervisor. She then for-
6 

warded me to a many who identified himself as Steve Evans, gave

a badge number.

He told me that if I broke connection with him, the warrant

would be filed. The only way to pay the amount owed would be

through a Government Approved Center and by use of Green Dot

Visa cards. He indicated that Rite Aid was a place that handled the

Visa cards and gave me instructions on where the closest one was.

I indicated that I must get the money from the bank. He told me

to keep the phone in my pocket and under no circumstance say

anything about the IRS or why I needed the money. I should get

the money, then go to the Rite Aid store and purchase five Green

Dot cards, load each one with $500, then come back to the car and

scratch off the cards and give him the numbers. He said he must

check to see if the funds went through, and while he did that, he

switched me to an assistant, and that I must acknowledge every

thirty seconds that I was on the line with him.

After successfully transmitting the scratched off numbers, he told

me to go to another Rite Aid store and purchase five more. I followed the same procedure the second time.

Realizing that he had a gullible victim, he then said that he

wanted to notify me that there was a miscalculation, that I owed

another $5,000, so I went to the bank a second time, borrowed the

money, then I proceeded to the Rite Aid store according to his instructions, and if I broke connection for any reason, the warrant

would be issued immediately.

Thinking that I had cleared the matter, he indicated that I still

owed $6,000 from 2008, so I went to the bank a third time, borrowed $6,000. The lady at the bank asked me if everything was

okay. I responded it was just personal business. I followed the

exact same protocol, and by the time I paid the $6,000, it was 3:30

in the afternoon, over six hours into the conversation. I told him

that I had a medical appointment and needed to honor it.

This Steve Evans told me that he had good news for me, that I

should receive a refund of $8,900. He had to clear it with the Attorney General’s office and then he would instruct me on the method

of the refund. He would contact me before six p.m.

Realizing then that I had been scammed, I immediately talked

with my attorney. He, too, knew that I had been scammed. However, in my attorney’s presence, I called Steve Evans back to inquire of the refund. He said that he was still waiting on the documentation from the Attorney General’s office, that they were closed

for the day, and that he would call me by 8:30 the next morning.

When I did not hear from him the next morning, I called him at

9:00 a.m. He then proceeded to tell me the next morning that I

needed to forward another $4,900 in order to get my $8,900 back.

By then, I had made a phone call to the local FBI. They had directed me to the Treasury Department.

With the thought that maybe my line might be tapped, I answered the phone again when Steve Evans called me back. I kept

him on the line with hopes that possibly somebody might be listening in. He again threatened me, even though I told him I knew he

was scamming me. I hung up.
7 

Within ten minutes, he called me back on another number.

Thinking it might be an agency of the government, I answered the

call. It was Steve Evans again, making his familiar threats.

In summary, I will easily confess the question can be raised as

to how could anybody be so gullible. The short answer is that I was

the perfect victim. I had never had any issues with the IRS and

had no idea how they operate. I was well aware that many years

ago, my father had a very difficult experience with the IRS. They

were very harsh with him, never responded when they found out

his calculations were correct, so for all I knew, the call of the impersonators was very believable.

I am also fortunate that I have not had to pay fines for major

traffic violations and had no reason to assume that payments

should not be made by way of Green Dot Visa cards. The scammers

also talked a lot about notifying the media, and in my profession,

that could be a nightmare, so I was the perfect victim.

I am sharing my experience for one reason only. It is with hopes

that my involvement might assist in stopping this scam and prosecuting these criminals. There is no way to gauge the amount of

hardship they have created for so many individuals. I get no pleasure out of sharing such an embarrassing experience. My only reward for being public with my shame is to communicate to as many

people as possible that the IRS does not do business over the phone

and that when calls are received, hang up. That is my reason for

being here today.

Thank you.

The CHAIRMAN. Thank you very much for your extremely helpful

testimony. 

Detective Moore.

STATEMENT OF JASON MOORE, DETECTIVE,

AUBURN POLICE DEPARTMENT

Mr. MOORE. Chairman Collins, Ranking Member McCaskill, and

members of the Committee, thank you for the opportunity to testify

today. 

As you know, I am a police detective with the Auburn Police Department in Maine. I have been there for 17 years, and I recently

handled a case involving a 50-year-old grandmother from Auburn

who was scammed out of $23,000 by someone posing as an IRS

agent. The victim is very embarrassed and has requested anonymity, and so I will refer to her as Mrs. A for the purpose of this testimony.

Mrs. A came into the Auburn Police Department to report that

she may have been scammed. She explained that she received a

message on her home answering machine that stated she was

being sued by the IRS. She returned the call and spoke to a man

with an Indian-sounding accent who stated his name was Alex Rogers. He identified himself as an agent with the IRS and provided

a badge number.

He stated that he was calling regarding a tax audit because Mrs.

A had used the wrong tax rate when she filed her taxes. He said

that she owed $4,982. He told her that if that was not paid by 5:00

p.m. that day, she would be arrested and liens would be placed on

her property. Mrs. A explained that she had her grandchildren
8 

with her and would be unable to pay that day. Mr. Rogers said that

was no reason and they would still come arrest her. He also told

her that she could not tell anyone that she had been contacted by

the IRS, including her husband.

Mrs. A said that she was very nervous and shaking at this point.

She questioned why she had not been previously notified by the

IRS and why the IRS had not mailed her a letter. Mr. Rogers said

that due to the seriousness of the matter, the papers had to be

hand delivered.

Following Mr. Rogers’ instructions, Mrs. A went to her bank and

withdrew cash. She then went to a Walmart and purchased multiple MoneyGrams that were directly loaded to a prepaid card. She

was told to buy them using a different sender name for each

MoneyGram. She was then sent to the nearest Bank of America

branch, which is about thirty minutes away from her, and was instructed to wire funds to a specific account.

There was a technical issue which prevented the wire transfer,

so the scammer sent her back to Walmart to purchase more prepaid cards. At 6:00 p.m., Mr. Rogers told Mrs. A the IRS is closing

for the day and the legal action will be put on hold until 9:00 a.m.

the following day.

Throughout this ordeal, Mrs. A was told to stay on the phone.

She was continually threatened with arrest if she told anyone that

she was in contact with the IRS or failed to make payments as instructed.

On a couple of occasions, her phone lost connection. She then received a call from the Auburn Police Department—at least the

number displayed that—and she spoke with a person who claimed

to be Lieutenant Green, though there is no one employed there by

that name. Lieutenant Green said if she continued to hang up that

she would be arrested. She explained that these are unintentional

drops and he said that he would fax Mr. Rogers. After ending that

call, Mr. Rogers called back and she asked if the fax had gone

through and he said it had.

Throughout these events, Mrs. A had her two grandchildren with

her. She was in tears when she returned home that evening and

was too scared to tell her family why she was so distressed.

Mr. Rogers called back Friday morning. He was now claiming

Mrs. A owed another $7,432. He had her speak to two other people

who were supposed to be with the IRS, one an account manager

and one an attorney. They had her make another deposit at the

Bank of America—they had her make that deposit at the Bank of

America. 

Afterwards, they told her that they needed another $900 for document fees. She began to cry and was told if she continued to cry,

they would hang up and the process would start all over again.

She was then told they had discovered another $14,322 that was

due. They said they would settle for $10,500 that day and she

would receive 40 percent back in her tax refund in three weeks.

Mrs. A was next directed to obtain $6,300 in money orders from

Western Union, which she purchased and then shipped to a Days

Inn in South Carolina. She was again continually threatened

throughout the day. The scammers told her that the IRS offices
9 

were closing for the weekend and they would call her again Monday morning.

Upset by what had transpired and becoming increasingly suspicious, Mrs. A went to the Auburn Police Department. She

brought with her all the receipts for the transactions. When I was

meeting with her, she received a call on her phone. She said it was

them. I assumed this meant the scammer, so I answered. I found

myself speaking with a male with an Indian-sounding accent. He

asked to speak to Mrs. A and I told him he could not. The male

persisted in his request to speak with her, so I hung up.

Within seconds, her phone rang again. I could see it was the

same caller and I again answered. It was the same male again asking to speak to Mrs. A. I told him that every time he called, he

would be speaking with me. He continued to ask to speak with

Mrs. A, even saying ‘‘please.’’ I was firm and rude with him to the

point that he hung up.

Since Mrs. A had made cash deposits at a Bank of America

branch, I thought it was important that I notify them. I also wanted to inquire if there was a way to reverse the deposit, since it was

made as part of a fraud. It took several attempts for me to reach

somebody, but I eventually made contact with a Ms. Chauntel

James, who is a Senior Investigator with the Fraud Investigations

Group. Ms. James later advised that the Bank of America had been

successful in halting the wire transfer. I understand from Ms.

James that Bank of America was also able to recover money for

victims in California and New Jersey totaling $34,000 from that

same account. Bank of America has agreed to refund Mrs. A her

$12,432. From speaking to Ms. James, I understand that if Mrs. A

had torn up receipts as she had been instructed to do by the

scammers, she may not have been able to recover her money.

On behalf of Mrs. A, I filed a complaint online with the Treasury

Inspector General for Tax Administration. She received a call the

next day, and an agent has been assigned and is working on the

case. 

I and other detectives with whom I work have fielded calls from

citizens who have received calls similar to the one Mrs. A did. I

myself received one the day I first began investigating this. I feel

that there are other victims who have not reported these crimes as

they have fallen victim and may be too embarrassed to report it,

or may be unaware that they were even scammed.

I am hopeful that our public outreach will serve to minimize future victims of this crime. I am, however, dismayed that Mrs. A’s

large volume of money orders and prepaid card purchases were unchallenged by the retailers. She has been given little hope of recovering the remaining $11,000.

Again, thank you for the opportunity to testify. I would be happy

to respond to any questions.

The CHAIRMAN. Thank you very much for your testimony and

your effective work.

Dr. Cadenhead, I was struck by the fact that it appears no one

at the Rite Aid questioned your buying so many cards, and Detective Moore talked about that he was surprised that there was not

more questioning by the wire transfer companies. This has been an

issue that we have raised before in our hearings, that is there not
10 

a responsibility on the retailers’ part to just question, without invading the privacy of the individual, but just raise some questions.

Would that have been helpful in your case, Pastor?

Dr. CADENHEAD. Senator, I think early on, it would have been

helpful, when I am totally covered up with angst about this whole

thing, and this is how many Green Dot Visa cards it took in the

course of one day to transfer $16,000 to them. You can only purchase five, or you could at that time only purchase five, load each

one with $500, so you might think that—and I had to go back to

the second—after noon, you can go back to the same Rite Aid again

and purchase more. For four hours, you cannot purchase any more,

but after four hours, you could.

Even then, nobody said, ‘‘Is there a problem?’’ My bank did. The

lady at the bank did ask me. She said, ‘‘Dr. Cadenhead, is there

a problem?’’ I just said, no, it is personal business, but nobody in

the Rite Aid store even questioned that maybe something was

going on when I continually went in and bought five at $500 each

over and over.

The CHAIRMAN. Detective, do you think that that would have

helped with Mrs. A’s case, if someone at the wire transfer business

had said, ‘‘Gee, is the reason that you need this money, or is there

something we could help you with? You seem distressed.’’

Mr. MOORE. Yes, I do, and I simply asked her, I said, did anybody challenge you at any of these locations? You are buying multiple—and, especially when she is buying the MoneyGrams. She is

instructed to get them all from different names, so not just Mrs.

A, but Mrs. B, Mrs. C, Mrs. D. I think that would be a huge red

flag to the retailer, but she was unchallenged at any location,

Western Union or MoneyGram.

The CHAIRMAN. That is an extraordinary detail that I did not

know until just now, that she was using different names and yet

going to the same retailer. I mean, talk about a red flag. How much

bigger a red flag could you have?

Mr. MOORE. I agree.

The CHAIRMAN. That is extraordinary.

Another element that both cases seem to have in common is the

use of technology to spoof the call so that it looked like it was a

legitimate call from government. Doctor, we were talking before the

hearing. 

Dr. CADENHEAD. Correct.

The CHAIRMAN. Could you talk a little bit about that and what

led you to believe that it was truly the IRS calling you.

Dr. CADENHEAD. Yes. It showed a Washington area code, and I

even asked at one point, what was the address, and this Steve

Evans gave me the actual address of the IRS office here in Washington, and I would ask questions of it.

One thing that I might add about the warning that maybe some

retailer might give is that they are incredibly intimidating—not the

retailer, but the phone call. They convince you that you need to

have the phone in your pocket, do not say anything about the IRS.

You are almost afraid they will ask you at that point about it because you do not know what to say. He is listening to the conversation in my pocket. Even if they had said something, I would have
11 

been very leery, at that early point, anyway, of saying much other

than, yes, I just need it for personal business.

The CHAIRMAN. Well, I am struck in hearing both cases how

ruthless the con artists are, but also how sophisticated and clever

they are. If this were an agency other than the IRS that they were

pretending to be, it is doubtful that the level of anxiety that you

would have would be quite so high. If this did not have the constant threats and phone calls and explicit instructions, and in your

case, Pastor, even knowing where your local retail Rite Aid

was—— 

Dr. CADENHEAD. He directed me to them. He directed me to

every Rite Aid, told me how to get there.

The CHAIRMAN. That is extraordinary, that kind of level of

knowledge, and clearly, they used the threat of embarrassment,

also, with both of the cases that we have discussed. I wonder, we

have a lot of members present, so I am going to go on to the next

questions, but I do want to thank you both.

Just one final point, and that is for Detective Moore. How important was it that you acted so quickly on this case, because one of

the complaints we have heard when people go to the FBI or try to

contact the Federal Government is nothing happens quickly enough

to get that money stopped.

Mr. MOORE. It was vital. If I had delayed at all, I would not have

been able to recover any money. I was fortunate on that day that

I was aware of the case that had come in over the weekend and

that I was able to turn my full attention to it. Before I even had

a chance to call Mrs. A, I was actually reading the report and I

found out she had come in on her own, so her coming in helped tremendously, too, so I could get going faster.

I spent a considerable amount of time on the phone that day trying to get hold of the Bank of America, because I knew that was

my only chance to recover some of her money. I got passed around

a lot, passed around a lot, but eventually, I got through to somebody who could help, and when I was speaking to her, she let me

go because she noticed that the wire transfer was actively going

out. The criminals were taking it as we were speaking, so if I had

delayed, they would not have been able to notice that. They would

not have been able to stop it, and we would not have been able to

recover any funds, and not just Mrs. A’s, but those two other victims in California and New Jersey.

The CHAIRMAN. Thank you.

MCCASKILL. I wonder, do the victims in California and New Jersey know that you saved their money?

Mr. MOORE. I do not know.

Senator MCCASKILL. Congratulations on that.

Mr. MOORE. Thank you.

Senator MCCASKILL. Dr. Cadenhead, did the criminals know that

you were a pastor?

Dr. CADENHEAD. I have no way of knowing exactly. They very

quickly began talking about public image, that they were notifying

the media, and they really played that card well, and I do not remember telling them——

Senator MCCASKILL. Yes. The interesting thing that has happened is that criminals have the ability now with the Internet to
12 

go in and find ministers or find people that have a public profile

that might be more likely to be very concerned about——

Dr. CADENHEAD. Yes.

Senator MCCASKILL [continuing]. something happening in the

public media, and certainly they had done the homework to figure

out—which is not hard, I mean, from anywhere in the world, you

can figure out where the nearest CVS or Walgreens or Rite Aid is,

just by the beauty of the Internet.

Tell me what happens after you figure out that it is a scam and

these are criminals. Other than praying for their souls, which they

need a lot, because I do believe there is a special place in a bad

place for people who do this, tell me about where you went and

what you did as it relates to law enforcement.

Dr. CADENHEAD. I was fortunate in that the afternoon, that afternoon, late, I was at church with my attorney, whose daughter

works in a firm that she works next to a person who was a former

Assistant U.S. Attorney. She was able to give me some instruction

about where to go, but the next morning, I immediately contacted

the local office of the FBI and they instructed me to go to the Department of Treasury, that there was a website set up, to enter the

information on that website, so I immediately did that, filled out

the report, and beyond that, I did not hear anything else from anybody that day.

Senator MCCASKILL. Did you eventually hear from anyone else?

Dr. CADENHEAD. No.

Senator MCCASKILL. You have never heard from Federal law enforcement at all?

Dr. CADENHEAD. No. I did—I am also a writer for the Charlotte

Observer and was to do a column that very next Saturday, the first

Saturday after this occurred, and I called the editor and told him

what had happened, would it be okay if maybe I talked about it

in my column, and he said he would like to do more than that, that

he would really like to have the paper cover the story, so he sent

an Observer reporter out and it appeared on the front page of the

Charlotte Observer that next Sunday morning.

That got the attention of folks in Raleigh, and then I got a call

from the Attorney General’s office, from the Better Business Bureau, and they set up a press conference, so the press conference

immediately got the word out and some things began to happen

after that, but did I hear from the FBI? No, not that I recall.

Senator MCCASKILL. Detective, you, in fact, have local jurisdiction for a fraud that occurs to someone who lives in Maine.

Mr. MOORE. That is a point in contention that we always come

across with the prosecutors. Where did the crime actually occur?

Senator MCCASKILL. Yes, and this is the kind of crime that every

prosecutor wants to be someone else’s jurisdiction——

Mr. MOORE. Yes.

Senator MCCASKILL [continuing]. because it is incredibly challenging to catch these people, because they are—nine times out of

ten, maybe 99 out of 100—the people who are actually talking are

not in this country.

Mr. MOORE. Correct.

Senator MCCASKILL. They are located in a different country, and

that is why the Federal authorities are so important here.
13 

I was fascinated by the fact that this was supposed to go to a,

was it a hotel, Days Inn in the United States?

Mr. MOORE. A Days Inn in Greenwood, South Carolina. She addressed that package simply to ‘‘Andy.’’

Senator MCCASKILL. To Andy at Days Inn?

Mr. MOORE. Yes.

Senator MCCASKILL. Did you have an opportunity, or do you

know if anyone in Federal law enforcement had an opportunity to

contact Days Inn and find out who Andy was, because, clearly, that

is somebody who is on our soil.

Mr. MOORE. To my knowledge, the Treasury agent is following

up on that.

Senator MCCASKILL. Okay.

Mr. MOORE. We have not been able to talk directly, but he has

told Mrs. A that he has agents from that area following up on that.

Senator MCCASKILL. Well, one of the things——

Mr. MOORE. Mrs. A herself called down there and talked to staff

and they thought they knew who that person’s last name may be.

Senator MCCASKILL. Okay, because that is a huge get——

Mr. MOORE. Yes.

Senator MCCASKILL [continuing]. because once you grab one,

then you turn the screws and all of a sudden you are talking to

other people who are setting up these people in other countries who

are actually making the call, so I think it is really important for

us to keep following up with Treasury and with FBI about how

many people have they actually arrested. Are you aware of any actual arrests and prosecutions that have occurred with the IRS

scam? 

Mr. MOORE. I am unaware of any.

Senator MCCASKILL. Thank you.

The CHAIRMAN. Thank you.

Senator Tillis.

Senator TILLIS. Thank you, Madam Chairman.

The question I had relates—well, first off, I just want to echo

what the Chair and the Ranking Member said, that it is unacceptable for DOJ not to be here, because a part of what we need to do

is figure out strategies we can use for effective prosecution. Hopefully, they will see the benefit of coming and visiting from time to

time. 

My question really relates to something that is in the staff memo

and it is the IRS numbers by State. You may not have seen this,

but it is a stack ranking of the incidents and the dollar loss, and

I am wondering if there are, to your knowledge—you may not be

aware, it may be a question for the other panelists—if there is anything to learn from some States that have relatively high populations but, relatively speaking, lower incidents of this sort of scam,

or scams in general. Could it be possible that the State legislatures

or through other agencies they provide a higher level of awareness

to make it less likely that it occurs? Are you familiar with any

States that seem to be ahead of the game or leading the charge

more? 

Mr. MOORE. I am not aware of that, and Maine being a somewhat rural State, I think maybe the word does not get out as well,
14 

and so maybe these other States are more well informed, as you

indicated. 

Senator TILLIS. Yes. I think you all had about eleven incidents.

I was just looking at North Carolina. It is probably—well, it is the

ninth most populous State, but it is 41, or, let me see, somewhere

down in the—maybe 30th or 35th in incidents. I was just curious,

because one thing we did in the legislature was a little bit more

financial—I should say, public awareness in general, so I am just

curious if there is something we can learn from that as a part of

prevention. 

I am wondering what we do—when we talk about the retailers—

when I think about a Rite Aid, I think about an 18-to 20-something

kid that sees somebody coming up with five of these cards and they

are just running them through like they are the deodorant or whatever else they are buying there. What more could we do, or do you

know of anything, any collaboration with the issuers of these cards

to really step that up and make people think about are you being

scammed at that point of retail? Is that a significant point of opportunity or choke point for us?

Mr. MOORE. I agree with what you are saying and I think it

comes down to a training education for the retailers, because, as

you said, it is usually a young populous that is manning these and

selling them, so that they should be made aware that some of these

red flags, like Mrs. A is buying for Mrs. B and Mrs. C and Mrs.

D, and she is buying six of them, all from a different name.

I think, internally, the computer system should at least flag that.

The scammers are aware of it. They know what dollar amounts not

to break, so they have her get multiple ones at the same dollar

amount. 

Senator TILLIS. Detective Moore, I had a question that had more

to do with law enforcement. With respect to training, when somebody picks up the phone and says that I may be scammed, do we

have adequate training at the local level for people to take that seriously, and do we have any kind of tools that are in place or discussion of tools that could be put into place to make it more likely

that we can track back these things, because the way that they are

structuring it on the Internet makes it virtually impossible, unless

you know it is a scam from the beginning and you can kind of take

advantage of that, but are there any, in law enforcement circles,

discussions of, boy, if we had these tools, we could at least get back

and claw back of some of these?

Mr. MOORE. I am not aware of the discussions, but there is always room for improvement. You know, I get one of these cases.

I am not always exactly sure of the jurisdiction, who is going to

handle it in the end, so I just do whatever I can up front to identify

where the crime is occurring, who the criminal may be, and if I can

at least stop the transfer of money, do that, and then, from there,

look out to the larger Federal law enforcement agencies who may

have the jurisdiction.

Senator TILLIS. Okay. Madam Chairman, just a comment. I think

it is remarkable that we could have an agency where you would

think it would be likely that you would get that kind of call, so that

tells me that the IRS needs to spend some time not making it likely that the average person gets a call, thinks they are talking from
15 

a heavy-handed regulator that they should be afraid of, that they

would go to this act. I could see how anybody could do it. I think

about my mother and other family members who have been subjected to it, but my mother does not like the IRS, so she is the one

that hangs up on them, but it is—I mean, we really need to think

about the image we project in these agencies so that you are afraid

of a government agency and that would lead you—that creates the

pretext for the scam to occur, and I think that says something

about what we need to do a better job of in terms of projecting our

image and more of a customer service image than a bullying entity.

Dr. CADENHEAD. There is one other dynamic here. We have been

told that the scammers will also sell our numbers to other people,

and since that day in October, I have gotten numerous calls from

other attempts at other things, so there is a whole industry out

there selling numbers to other scammers. It is amazing.

Senator TILLIS. Thank you.

The CHAIRMAN. Thank you very much.

Senator Kaine.

Senator KAINE. Thank you, Madam Chairman, and thank you to

both of you for your testimony. Dr. Cadenhead, I really appreciate

you being willing to make an example—be an example, even—in a

difficult circumstance that was obviously painful and costly to try

to teach others that, hey, do not fall for this. That has been—it is

very admirable that you have done that, and the local coverage and

national news coverage, I am sure, has helped a lot of people out,

so I really appreciate you doing that.

Dr. CADENHEAD. I hope so.

Senator KAINE. Detective Moore, I just was kind of curious, when

you were with your Mrs. A and she was getting the phone call, not

having been in the kind of criminal investigations—I was a lawyer,

but only a civil lawyer—if you were able to trace calls like that,

would they be blocked? Would there be no way for somebody who

is taking that call, if they think, I think this is definitely a scam,

now what can I do to keep this person on the line so I can try to

track them down—but, would that be a dead end, probably?

Mr. MOORE. Yes. I have no means to trace that call as it was

happening. 

Senator KAINE. Mm-hmm.

Mr. MOORE. For most—a number of her calls were spoofed. Like,

she received a call from, supposedly from my agency, which was a

spoof—— 

Senator KAINE. Yes.

Mr. MOORE [continuing]. received calls from our local District Attorney’s office, that was a spoof, and I assume the number that he

called from that day when I spoke to him was just a VOIP number,

a Voice Over Internet Protocol——

Senator KAINE. I missed the beginning of Dr. Cadenhead’s testimony. You indicated that the material suggests a lot of these may

be coming from India, that it was an Indian-sounding voice. Was

that the same case for you, Dr. Cadenhead?

Dr. CADENHEAD. Yes. One of the flags for me, finally, earlier in

the afternoon—middle afternoon when I became aware that it was

a scam—was that when I would come back to the car, scratch off

the numbers, give them to this Steve Evans, he would disappear
16 

and would say to me, ‘‘I am transferring this call to one of my assistants. Please hold and let him know every thirty seconds that

you are still on the line.’’ Every thirty seconds, I had to say, ‘‘Still

on the line. Still on the line.’’

This happened several times, but everybody they transferred me

to had an Indian accent. They all had American names. It was

Steve and Mike and Susie, but they all had Indian accents, and I

began to think—and the background noise, it sounds like you are

in a cubicle and a lot of other business going on. It sounds just like

what you might imagine at a floor of IRS agents.

It began to dawn on me that after all this time, there is not

somebody whose name is Bubba or some kind of Georgia or North

Carolina name with a Carolina accent. They all had Indian accents

with American names.

Senator KAINE. Mm-hmm.

Dr. CADENHEAD. That was really one of the flags for me.

Senator KAINE. I guess, that is all part of making it very difficult

to enforce against someone. If this is all largely done overseas, that

really puts a dead end up or puts blocks up to enforcement.

All right. No further questions, Madam Chair.

The CHAIRMAN. Thank you very much, Senator Kaine.

Senator Heller.

Senator HELLER. Madam Chairwoman, thank you, and to the

Ranking Member, for holding this hearing, especially on tax day.

I think that makes it a little appropriate. I want to thank our witnesses, also——

Dr. CADENHEAD. Thank you.

Senator HELLER [continuing]. for taking time and being here

today and sharing your experiences and your stories.

Ranking Member McCaskill and myself are no strangers to marketplace scams. We served together, she as Chairwoman and I as

Ranking Member, for the Subcommittee on the Commerce Committee dealing with consumer protection, so we have heard a lot of

this and have worked together trying to get to the bottom of some

of these things.

The chart that Senator Tillis had that talked about the different

States, Nevada lost nearly $300,000 recently to IRS impersonations, and they said they had 58 cases. My concern is this. We

have 58 cases. For every time yourself, Doctor, comes forward and

shares what you have done and goes to the authorities, there are

numerous people that do not. You know, the 58 cases in Nevada

are probably multiples of those kind of numbers, and I fear—do not

feel alone in this. This is pretty large scale.

Now, just within the last couple of months, both my father and

my daughter were affected by similar situations, not specifically

like yours, but fortunately, they stopped it before it got too far, but

they are shopping.

I guess my question, Doctor, is do you think they were trolling

or do you think they were looking for you specifically in your case?

Dr. CADENHEAD. I can only guess. It appears that—keep in mind,

this was six months ago, almost six months ago now, and it appeared they were a bit more specific then, but as the word got out,

it is just my hunch that more and more people were willing to hang
17 

up and not follow through and it required them making more calls,

maybe less scrutinized.

I have received, because of the press conferences and the CBS

coverage and some other networks, I have received letters and emails from people all over the country, and for them, the trigger

for them was the Green Dot Visa card. When the scammers started

talking about Green Dot, then they remembered the article or the

news broadcast, and for some reason, that woke them up to the fact

that this was a scam.

I really think, now, they are just calling indiscriminately. It is

just a ramped up number, trying to get their business back up.

The reason I ask that question is if I were looking through the

phone book for someone that was awfully trusting, I would think

a senior pastor may meet that qualification. Do you know of others

that are in the same field as yourself that have had similar issues,

problems, questions, phone calls, concerns?

Dr. CADENHEAD. After I came forward publicly and it was covered in the paper, there have been several local ministers who said

to me they had gotten the same call since that article——

Senator HELLER. Yes.

Dr. CADENHEAD [continuing]. and knew to hang up.

Senator HELLER. I would anticipate that they would think you

were pretty trusting individuals of your fellow human beings.

Dr. CADENHEAD. Public image is pretty important.

Senator HELLER. Yes, and that makes sense, also.

You know, I regulated the securities industry in Nevada for 12

years and did all the research, background checks for all the securities fraud that was occurring in the State at that time and some

of the stories are horrifying, of individuals who have a retirement

account, they are in their 60’s, 70’s, and even 80’s, losing this kind

of money to similar types of scams, and the most difficult part is

the restitution portion of it. Detective Moore, you talked about it.

What is your experience? What has been your experience in restitution, the ability to get somebody’s money back in similar cases like

the Doctor’s?

Mr. MOORE. Pretty much nonexistent. This is the only case I can

think of where I was able to recover money.

Senator HELLER. Okay. Give me some background, Detective.

How many cases have you had that are similar to this? You have

been doing this, what, since 2006?

Mr. MOORE. As a detective, yes.

Senator HELLER. Okay.

Mr. MOORE. At patrol level, they handle those same calls, and if

they reach a level where they can no longer handle it, it gets

passed on, or if it is a larger scale.

Senator HELLER. Can you give me some kind of an idea how

many cases like this you have dealt with?

Mr. MOORE. Personally, I cannot come up with a hard and fast

number. 

Senator HELLER. That is fine. That is fine.

Mr. MOORE. Probably just a handful, but——

Senator HELLER. In your office. In your office, I assume there are

multiple detectives.
18 

Mr. MOORE. Yes, and I would say we probably get at least one

a month.

Senator HELLER. One a month.

Mr. MOORE. Of varying, different scams.

Senator HELLER. Right. Right.

Mr. MOORE. I dealt with one not too long ago involving Green

Dots where a restaurant was called and the caller, pretending to

be Central Maine Power Company and saying, if you do not pay

by five today, we are going to shut your power off, and they just

happened to get hold of the owner’s mother. She unknowingly got

a Green Dot card and paid it out, and I had—the only thing I had

to followup on was a phone number. That went nowhere.

Senator HELLER. Again, share your experience with restitution in

most of these cases.

Mr. MOORE. Slim to none. Outside of this case we are talking

about today, I have never gotten money back from a scammer.

Senator HELLER. Madam Chairman, no further questions.

The CHAIRMAN. Thank you very much.

Senator Gillibrand.

Senator GILLIBRAND. Thank you, Madam Chairwoman.

I am very grateful for both of your testimony here today. I have

had roundtables all across New York State on this very issue

where I have met with seniors about how they have been targeted.

They have been targeted on the phone. They have been targeted on

the Internet. They have been targeted through the mail, and the

experiences are all similar in that they are pressured, they are confused, they are made to have to make decisions quickly without the

benefit of children or advisors, and the reality is, is our seniors

have a trillion dollars of assets and so they are just a very ripe target for criminals.

What I would like from you, Detective, what can law enforcement

do and advocacy organizations do better to inform seniors of how

to protect themselves? In some of the roundtables I had, it was the

first time seniors actually had someone come in and tell them,

these are the things to look out for. These are the things that we

have known have already happened in this community, and they

are very grateful to get phone numbers and someone to call to

verify if something is true or not. What has your experience been

in trying to advise seniors of how they may be targeted in the future?

Mr. MOORE. Well, it is important, as you say, to get the word out.

Some people do not want to believe they are in a scam, and no matter how much you show them and tell them that the evidence is

that they are in a scam, they do not want to believe it, but it is

really important just to get the word out. We have taken to social

media. I have posted on my personal social media page, and as I

field calls from people who are getting these same voice mails at

home, I tell them it is a scam. Tell everybody you know that it is

a scam. If it is truly the IRS, hang up and call back to verify. They

will not object. A scammer will adamantly object every time.

Senator GILLIBRAND. Do you have any thoughts about how victims are targeted? I know in some of the examples in New York

State, the criminals knew the names of the person’s children, and

so they might call—or grandchildren—and might call their grand-
19 

mother and say, oh, ‘‘I am in school. I am in a lot of trouble. Can

you wire $2,000 immediately? If I do not get this money, I am

going to—’’ and, of course, the grandmother responds immediately.

Have you had a sense of how sophisticated some of these criminals

have been in terms of researching their victims in advance?

Mr. MOORE. I have not personally dealt with any of that level of

sophistication. I have heard of similar scams to that.

Senator GILLIBRAND. Mm-hmm.

Mr. MOORE. The one with Mrs. A here, I believe she was just a

victim of trolling. I think they are just calling numbers and wait

and see——

Senator GILLIBRAND. Try to get one.

Mr. MOORE [continuing]. who calls back.

Senator GILLIBRAND. Mm-hmm.

Mr. MOORE. I did not get the impression they had any prior

knowledge of her name or demographics or anything. The voice

mail she received was generic. It did not address her, anything

about her family. It simply stated, ‘‘This is the IRS. You are being

sued. Call us back.’’

Senator GILLIBRAND. Doctor, did you ever have any conversations

or information from your church community, from your local community about how seniors had been targeted in your community?

Had you ever had any notion that this could happen to you?

Dr. CADENHEAD. Well, I have had several who talked about the

same kind of scenario you just mentioned——

Senator GILLIBRAND. Mm-hmm.

Dr. CADENHEAD [continuing]. where they were contacted by

someone who knew their name and also knew their grandson’s

name—— 

Senator GILLIBRAND. Right.

Dr. CADENHEAD. This has happened three or four times with people in our congregation, that they were in trouble and that they

needed them to——

Senator GILLIBRAND. Send money.

Dr. CADENHEAD [continuing]. send some money.

Senator GILLIBRAND. Yes.

Dr. CADENHEAD. In fact, it happened to my own father in Georgia——

Senator GILLIBRAND. Yes.

Dr. CADENHEAD [continuing]. same thing exactly.

Senator GILLIBRAND. When your congregation talked about it,

was it a service that your church was providing, or did it just come

up in social conversation?

Dr. CADENHEAD. Social conversations, and of course, after October, I became the target for everybody’s latest information on any

scam going on, so it became sort of a topic, a fairly public topic

after that.

Senator GILLIBRAND. Do you think communities would receive

outreach from either law enforcement or church communities or

community centers to begin to have classes on how you could be

targeted, things to be careful of, how to respond to a caller asking

for your bank account number, you know, all the scenarios that

happen every day? What do you think the most effective medium
20 

would be, for you personally or for the people you know well, to get

that information out to them in a friendly and approachable way?

Dr. CADENHEAD. Well, people get their news in different ways

now. Younger generations really do not always read newspapers,

but older generations do. I think any information that can be

passed along——

Senator GILLIBRAND. The newspaper might be a good venue.

Dr. CADENHEAD. Absolutely, and television. Most everybody still

watches television. I think any way that you can get the word out.

The way we get our news is different depending on the generation.

Senator GILLIBRAND. Right. Detective, what is your experience in

that? What would you recommend if we were to create an avenue

or a grant program or something that people could apply for funding? What would you recommend for the victims that you have

helped? 

Mr. MOORE. Any way to get the information out is helpful. I am

not sure how my victim could have been addressed in advance,

maybe through—maybe banks could provide pamphlets, but any

kind of information, newspaper, television, so that people know

what to expect, what the signs are that this is a scam and should

hang up and call law enforcement, the police, to verify.

Senator GILLIBRAND. Mm-hmm.

Dr. CADENHEAD. I might add, too, that in most cities, the Better

Business Bureau is ready to provide that kind of help. In Charlotte, they have an entire clinic they can perform for you, and a

local congregation would be a great place for that to occur.

Senator GILLIBRAND. Yes. Maybe we could work through that,

Madam Chairwoman, and find ways to get information out.

The CHAIRMAN. Thank you.

Senator GILLIBRAND. Thank you.

The CHAIRMAN. Thank you.

Senator Perdue.

Senator PERDUE. Thank you. First of all, thank you both for

being here——

Dr. CADENHEAD. Thank you.

Senator PERDUE [continuing]. and Detective, thank you for your

specific effort here.

I just have a couple questions of the Detective. Dr. Cadenhead,

I am from Georgia, but I have spent a lot of time in Auburn-Lewiston, so I appreciate what you are doing up there. They did not call

me Bubba when I was a kid, though.

I have a generic question. This is going to be very difficult, but

I want to get your personal feelings on it. I mean, we know this

is a difficult crime to measure because a lot of people do not report

it. In your community and your experience, do you have any feel

for what percentage of these crimes go unreported?

Mr. MOORE. I could not estimate how many go unreported, but

in dealing with my victim, Mrs. A, I get the impression if it was

not for the substantial amount of money, she may not have reported herself. I mean, she is just so embarrassed and mortified by

this, and I get the impression of people even losing a few hundred

dollars or even a few thousand may not report it.

Senator PERDUE. Right.
21 

Mr. MOORE. Some of them may not even know. They may think

that is how the IRS works these days.

Senator PERDUE. Dr. Cadenhead, in your congregation, do you

have a feel for that?

Dr. CADENHEAD. Well, I think—I can only guess. I have no way

of verifying it, but my guess is there are as many out there who

have not reported it as those who have. I know how difficult it was

for me to become open and public about this, and the only reason

my wife and I agreed was that it might be of some help to other

folks, but it was a difficult decision to make because it is very embarrassing.

Senator PERDUE. Yes, sir.

Detective, you know, a lot of these calls come into the local authorities or maybe the State authorities or whatever. What kind of

training would you see would be fruitful to help these first-line

service people help a potential victim or an, indeed, victim?

Mr. MOORE. Something as simple as maybe a checklist on who

can assist—what agency can assist us with this. Like, I have no

means to trace a lot of this, so to know who I can reach out to, and

I turned to the Internet myself and that is how I came across the

number for Treasury to report this, and I filled out the form on behalf of Mrs. A and they were very responsive. They got back to her

the next day, but oftentimes, I am not exactly sure which agency

to turn to for assistance.

Senator PERDUE. Did you seek Federal or State help in any of

those cases that you have dealt with?

Mr. MOORE. Yes, whenever I can.

Senator PERDUE. What kind of responses did you get?

Mr. MOORE. This one, in particular, was—I filled it out and I provided her information and they got back to her the very next day,

which I was very impressed with.

Senator PERDUE. And that helped you in this case, obviously.

Mr. MOORE. Yes. In the past, I have called the FBI and gave

them, you know, this is what is going on, it is widespread scam we

are dealing with. They took the information and I never heard anything again, so I do not know what they did beyond that.

Senator PERDUE. You both are very knowledgeable about this,

obviously, from personal experience and helping the victims, but is

there any sense in your mind that there are networks perpetrating

this, or are these individuals, or do you have any sense of that in

your experiences?

Mr. MOORE. Based on the way they pass the calls around to multiple people, it has got to be at least a small network. I could not

estimate how large. I mean, they could be separate cells working.

I mean, it could be a separate cell that called Dr. Cadenhead as

opposed to called my victim, or it could be just one big network.

Dr. CADENHEAD. Because of the number of calls being made and

the wide area over which those calls are being received, it has to

be a network. There is no way any small group can make it happen, and all the calls, whether it is Steve or her or him or whoever

the person might be, they are so similar. I mean, they are working

for a script and they have a response for every question that you

might raise. They can answer it and tell you exactly why you

should not do this or should do that. They constantly talk about
22 

protocol. Do not break protocol, they will tell you, or else we will

file the warrant.

Senator PERDUE. Detective, I saw in your story they try to keep

them on the phone while they are going through this perpetration

of fraud, is that right?

Mr. MOORE. Yes, and that is the same thing that happened to

Dr. Cadenhead that happened to my victim. Stay on the phone. Do

not hang up. You know, when my victim lost connection due to the

poor cell service at Walmart, they assumed she was hanging up on

them, and that is when they spoofed the police department’s number and called her back and said, ‘‘You are going to be arrested if

you hang up again.’’

Dr. CADENHEAD. Within the first thirty seconds—no, within the

first three minutes, he told me, ‘‘If you have a charger for your

phone, go ahead and plug it in because you are going to need it

today.’’ 

Senator PERDUE. Really.

Dr. CADENHEAD. He said, ‘‘If your phone goes dead, we are filing

the warrant.’’

Senator PERDUE. How long were you on the phone?

Dr. CADENHEAD. Six-and-a-half hours.

Senator PERDUE. One last question. What can we do at the Federal level in your mind, Detective, and if either of you have a

thought, I would welcome it. I am about out of time, but what can

we do in terms of helping the local—you are the front line officer.

You are going to get the call more than anybody else. What can we

do to help you?

Mr. MOORE. Just knowledge about who we can contact for assistance, what assistance is available, and what the best protocols for

responding to these are.

Senator PERDUE. Do you have any suggestions?

Dr. CADENHEAD. I think there are going to always be scammers.

It is always going to happen, but I think the more you can publicize this kind of thing to get the word out, educate people, I think

that is the other half of it, and it is just as important.

Senator PERDUE. Thank you both. Thank you.

The CHAIRMAN. Thank you very much.

I want to thank both of our witnesses on this first panel. You

have added enormously to our understanding of the problem by

giving us both the consumer perspective and the local law enforcement perspective. Thank you so much for coming to the hearing

today. 

Dr. CADENHEAD. Thank you.

The CHAIRMAN. I am now going to call forth our second panel,

Commissioner Brill and Special Agent Erichs.

Commissioner Brill, if you could proceed with your testimony,

please. 

STATEMENT OF JULIE BRILL, COMMISSIONER,

FEDERAL TRADE COMMISSION

Ms. BRILL. Good afternoon, Chairman Collins, Ranking Member

McCaskill, and other members of the Special Committee. I am

Julie Brill, a Commissioner at the Federal Trade Commission.

Thank you so much for inviting me to speak with you about the
23 

serious problem of IRS impostor scams. I am pleased to have the

opportunity to discuss with you some of the FTC’s efforts to help

consumers avoid these scams.

The powerful stories that the witnesses on the first panel shared

with you describe the MO that IRS impostors and other government impostor scam artists have developed and employ widely.

Many consumers would be terrified to receive the kind of call that

Dr. Cadenhead or Mrs. A received, and unfortunately, this sense of

terror only feeds into a scam that too often succeeds.

As we heard, an IRS impostor catches a consumer off-guard with

an unexpected phone call. The impostor often knows personal details, such as the consumer’s name, her address and Social Security

number, which convinces her that the call is real. The impostor

tells a plausible story about how the consumer owes thousands of

dollars in back taxes. He then—the impostor then threatens the

consumer with a combination of dire consequences: Arrest, prosecution, deportation, or revocation of the driver’s license that might be

key to her independence. Then, the final hook. The consumer can

avoid all of these problems with a simple but painful solution: Send

money through a wire transfer or preloaded debit card immediately.

Consumers who are targeted by these scams might believe that

they are not behind in paying their taxes, but they might also

think that maybe they made a mistake and that they will be better

off paying the amount of overdue taxes in order to make these

problems go away. Dr. Cadenhead described vividly how impostors

put these elements together, and I thank him, just as you all did,

I thank him very much for coming forward to shed light on how

these scams work so convincingly.

Dr. Cadenhead’s experience is far from unique. This pernicious

scam is growing rapidly. In 2013, the FTC received just over 2,000

complaints about IRS impostor scams. In 2014, the FTC received

over 52,000 complaints about these scams. If the trends that we

are seeing so far this year continue, we will reach nearly 90,000

IRS impostor scam complaints by the end of 2015.

While IRS impostors target many consumers, older Americans

are particularly vulnerable to them. Seniors often share sensitive

personal information, including their Social Security numbers, with

a wide range of family members and service providers, including

lawyers, accountants, financial advisors, and health care professionals. In many instances, seniors have accumulated assets that

make them attractive targets to fraudsters, and some seniors may

have diminished mental capacity and may not see the signs of

fraud when it is in progress or once it is complete.

The FTC plays a leading role within the Federal Government in

educating consumers about IRS impostor scams as well as assisting

consumers who have fallen victim to one of these scams, and luckily, it is possible to educate consumers about how to avoid these

scams, so consumer outreach is crucial.

As we say in our consumer education materials—and can you go

to the first slide, please? Thank you so much. This is from our—

this information, by the way, is on our website. We welcome any

of you to link to it on your websites, but this is an informational

poster that we have. What we tell consumers is that the IRS’s first
24 

contact with you will not be by phone or e-mail. The IRS will first

contact you by mail only, and the IRS will not ask you to pay back

taxes with a prepaid debit card or money transfer, just as we heard

earlier today, so we tell consumers that if you receive a call or email that appears to be from the IRS and they ask you to wire

money or send a prepaid debit card, it is a scam.

We also provide tips to consumers who do receive these calls.

Could we go to the next slide? Thank you. Do not give the caller

any personal information. Write down the name and number of the

caller. Hang up. Contact the IRS directly. Report the call by filing

a complaint with the Treasury Inspector General for Tax Administration, as well as with the FTC. Warn family and friends.

IRS impostor scams are serious crimes and need to be prosecuted

as such, just as you mentioned, Madam Chairman. As a civil law

enforcement and consumer education agency, we at the FTC also

think there is an important role here for consumer education, because we can teach consumers how to avoid these scams in the first

instance. 

I look forward to discussing these critical issues with you today

and to continuing to work with you on them in the future. Thank

you. 

The CHAIRMAN. Thank you very much, Commissioner, for your

testimony. 

We are now going to pause for just a moment of silence in honor

of the victims of the Boston Marathon bombings. The exact time is

2:49. We are very close to that time, and it seems appropriate for

us to just pause for a moment of silence right now.

[A moment of silence was observed.]

Thank you. As one who has a friend whose son was severely hurt

in that bombing, I thought it was important that we commemorate

the day.

We will now hear from Special Agent Erichs. Please proceed.

STATEMENT OF ALYSA D. ERICHS, SPECIAL AGENT

IN CHARGE, HOMELAND SECURITY INVESTIGATIONS MIAMI,

U.S. IMMIGRATION AND CUSTOMS ENFORCEMENT, U.S.

DEPARTMENT OF HOMELAND SECURITY

Ms. ERICHS. Chairman Collins, Ranking Member McCaskill, and

distinguished members, on behalf of Secretary Johnson and Director Saldana, thank you for the opportunity to discuss ICE’s efforts

to combat cross-border financial crimes, including consumer fraud

scams. 

Homeland Security Investigations, or HSI, is the investigative

arm of ICE and conducts criminal investigations to protect the

United States against terrorism and other criminal activity that

threaten public safety and national security and to bring to justice

those seeking to exploit our customs and immigration laws worldwide. In its investigative capacity, HSI enforces more than 400

Federal laws and regulations, with jurisdiction over investigations

of crimes with a nexus to the U.S. border.

As you know, there are many fraud schemes, such as tax fraud

schemes, bogus lottery and sweepstakes schemes, phony investment pitches, and business opportunities, and others which are

growing increasingly sophisticated and international in scope. Per-
25 

petrators will victimize consumers of all ages, backgrounds, and income levels, but the elderly are disproportionately targeted.

I understand the Committee is particularly interested in the scenario where the perpetrator impersonates an individual of legal authority over the phone, such as an IRS agent, attempting to collect

a tax or a fee that the victim allegedly owes to the government.

The scammer claims the tax or fee must be paid immediately or a

warrant will be issued for the victim’s arrest. Or, more urgently,

the warrant has been issued and will be served following the call

if the victim does not pay the amount requested immediately.

HSI investigates this and several other types of fraud schemes,

as well. One of the most common types of telemarketing fraud is

the lottery or sweepstakes scam. These schemes typically involve

fraudulent telemarketers identifying themselves as a lawyer, customs official, or lottery company representative to a potential victim.

In a typical fraud scenario, potential victims are led to believe

that they have won an international multi-million-dollar sweepstakes. The scammers tell the victims that in order to receive their

winnings, they will need to pay an advance fee. The fee is usually

described as a tax, insurance payment, or customs duty that must

be paid to release the winnings. The victims are instructed to send

the funds via mail, courier, wire transfer, or prepaid card. The

winnings are invariably nonexistent and the scammers steal the

victims’ money.

Most of these scammers are articulate and can involve a variety

of partners to defraud the victim over the course of a period of

time, a strategy that serves to increase the complexity of the matter and leads to a greater credibility to the scheme itself.

Scammers have also been known to repeatedly bombard their victims with nonstop calls, even employing verbal abuse, to coerce the

victims to comply. Intimidated, confused, and exhausted, victims

yield to the scammers’ demands.

I would like to take a few minutes to walk the Committee members through this one particular type of scam. HSI, along with several of the law enforcement agencies, have been investigating a

growing and pervasive scam where scammers, frequently operating

overseas, will contact American victims, pretending to work for

government agencies like the IRS and others, and they will falsely

and fraudulently tell victims that they have a tax lien or have committed some crime and must pay a fine.

We have also seen scammers call individuals and claim to work

for a local Attorney General’s office. The scammer tells the victim

that he or she will be charged with fraud, but that the victim could

pay a sum of money to avoid being charged. Victims will agree to

pay all or part of the money demanded, and then the scammers instruct them to purchase a third-party money transfer card and

later provide scammers with the information from that card.

At that point, the scammers will have the information they need

to collect the fraudulent proceeds. The money is then frequently

transferred onto a loaded prepaid debit card which can be used to

purchase money orders at a variety of reputable establishments.

Those money orders can then be ultimately deposited into bank accounts that scammers control.
26 

In one case, scammers stated that they purchased approximately

$5,000 in money orders each day, six days a week. Over the course

of nine months, our investigators estimated these scammers facilitated the transfer of $900,000 from victims to scammers operating

overseas. 

Outreach and education are critical components in addressing

telemarketing fraud. For example, the HSI Cornerstone Outreach

Program Initiative was launched in July 2003 and has grown into

a robust, unparalleled financial outreach program. The success of

the program is due in large part to the personalized collaboration

with financial industry partners, sharing red flag indicators relating to consumer fraud activity. Bringing together the expertise

from government and non-government is the core of the Cornerstone program in addressing financial vulnerabilities exploited by

trans-national criminal organizations.

Thank you again for the opportunity to appear before you today.

ICE looks forward to working with the Committee to reduce the potential for these criminals to harm our senior citizens.

I would be pleased to address any questions that you have at this

time. 

The CHAIRMAN. Thank you very much for your testimony.

I have to say that when we found out that only three people in

the United States appeared to have been prosecuted for these IRS

impostor schemes, that I did not expect that ICE, Immigration and

Customs Enforcement at the Department of Homeland Security,

would be involved. Could you explain the involvement of DHS in

these cases? Are you only involved if there is an overseas nexus,

or how do you get involved? I do not think the average consumer

or victim would think that ICE would be a place to go to get help.

Ms. ERICHS. Thank you, Madam Chairman. Yes, ICE is in a

unique position because, as I had mentioned in my testimony, we

enforce over 400 Federal statutes. With that, we also have a significant presence internationally. We have 63 offices in 46 countries, and with our agency with the nexus to the U.S. border, we

do investigate those crimes that have a nexus to the border.

In this case, it is money that is leaving the United States. It may

be leaving the United States in the form of cash. It may be leaving

the United States in the form of prepaid cards or wire transfers.

We also have the authority to investigate money laundering investigations domestically under Title 18, which is shared authority

with other agencies, as well.

We do feel that we are in a unique position to address this crime

because of our overseas presence.

The CHAIRMAN. How did the case that you successfully prosecuted come to the attention of ICE? Walk us through what happened.

Ms. ERICHS. Yes, ma’am. The case came to us—it was actually

referred to us from our U.S. Attorney’s Office. The U.S. Attorney

contacted us and told us of a victim who had indicated that he was

contacted by somebody claiming to be from the U.S. Miami Attorney General’s Office, obviously, sort of a blend of the U.S. Attorney’s Office and the State Attorney’s Office. That victim was told

that he had to pay $750 or he was going to be charged with fraud.
27 

The victim was able to at least say, I will make a good faith payment to hold it over while I look into the matter and agreed to pay

$150. The victim was instructed to go purchase a prepaid care—

a MoneyPak, excuse me—and load the MoneyPak with the money.

Obviously, after that time, we were contacted and were able to get

involved in the case, again, through the referral from the U.S. Attorney’s Office.

In that particular instance, this victim was out of State. It was

not within the Miami area of responsibility, but being able to determine through law enforcement efforts that the MoneyPak and the

prepaid card associated with then loading of those funds was negotiated within the Miami AOR. We went to one of the stores where

some of the transactions took place, had investigators go out and

check it out and spoke with their loss prevention folks. Again, a lot

of these, as indicated earlier, these are reputable businesses that

are selling products that the general public does use, but are being,

in this case, exploited by criminals.

We actually have an Organized Crime Retail Task Force within

HSI Miami where we partner with the retailers in our area, and

again, we do conduct outreach on a number of things, including

boosters and theft, but also that these products, and the

vulnerabilities that exist in the use of these products, or the misuse

of these products.

They dealt with the local loss prevention person and that person

was able to provide us with video. We subsequently were able to

identify the folks, because, low and behold, the next day they came

back and tried to negotiate another prepaid card, conducted a traffic stop, identified them, and from that point then used a variety

of law enforcement methods to trace their habit, what they were

doing, how they were moving the money and the cards, et cetera,

until, ultimately, they were arrested and charged with the crime.

One interesting point of this is to show again, and I know it was

mentioned earlier, how far they are willing to go. At one point during this case, in cooperation with Green Dot, we actually were able

to receive information on the Green Dot cards very quickly which

was able to assist us in this particular case, but we actually approached the targets and inquired whether or not they knew whose

name the cards were held in and whether they were, in fact, that

person, and whether they, in fact, knew that you are not supposed

to negotiate a card that is not yours, and they put someone else

on the phone to speak to us, posing as the cardholder, to try to convince us that this was a legitimate transaction that should be used.

What we are seeing in this case is very typical. It is a layering

process. It is a layering process of taking someone’s money initially

and loading it into, either from a MoneyPak, which, thankfully, no

longer exists through Green Dot, and then loading it onto prepaid

cards, and then loading it onto another prepaid card, and then purchasing money orders. It is a layering process to further distance

themselves from the victim, from attempting to find the trace—for

law enforcement to trace to them.

The CHAIRMAN. Thank you.

Commissioner Brill, you mentioned the number of complaints

that you have been receiving has soared, and I have a chart on

complaints by month, consumer complaints. I am not sure if these
28 

are all IRS impostor scams or whether it is scams in general, but

for March of this year, just last month, it shows more than 8,000

complaints, which if you annualize it, it is 96,000 complaints.

What do you do when you get these individual complaints?

Ms. BRILL. Thank you. We run the National Consumer Data

base, which is known as Consumer Sentinel, and all of these complaints are placed into our data base. Two-thousand law enforcement agencies at the Federal, State, and local level, as well as

some of our international partners, have confidential access to this

data base, and what we can do, we spot trends and that allows us

to begin consumer education efforts, as we have done vigorously in

this instance with respect to IRS impostor scams, but it also allows

the local and State and other Federal criminal law enforcement

agencies to figure out where the trends are and to proceed.

As you said yourself, Senator Collins, Chairman Collins, I believe, just as you believe, that there are two solutions to this problem, consumer education and putting them in jail. Those are the

two solutions.

We do not have criminal authority, so our job is the consumer

education side and the data base and the data trend side.

The CHAIRMAN. Thank you. I guess I would just say that I worry

a little bit that consumers think when they file a complaint with

you that that triggers a law enforcement response, and I have a

feeling Senator McCaskill will get into this in more detail——

Senator MCCASKILL. I am going to.

The CHAIRMAN [continuing]. so I am going to yield to her.

Senator MCCASKILL. The two people that have been arrested in

Florida, is that your case?

Ms. ERICHS. It is a case from my office.

Senator MCCASKILL. You are it. You have done it. You are the

only one in the whole freaking country that has pulled this off?

Ms. ERICHS. We have very—we have numerous cases like this,

but—— 

Senator MCCASKILL. Let me interrupt you, because here is what

I am really frustrated about. We have got Treasury IG——

Ms. ERICHS. Mm-hmm.

Senator MCCASKILL [continuing]. got a website, file a complaint

on a website. We have got the FTC. You can file a complaint and

you do a data base. We have got the Department of Justice who

is AWOL today. We have no idea what they are doing or if they

care. We have ICE. I cannot figure out why ICE has jurisdiction

here, criminal jurisdiction on these cases. It is surprising to me,

too. We have Treasury, and then we have State and local prosecutors.

It appears to me that this is all this and no one is doing a comprehensive effort to get everybody in the room. I mean, if these

people were moving crack cocaine or heroin, we would have interjurisdictional task forces immediately. I mean, inter-jurisdictional

task forces are a bread and butter in law enforcement because people move across State lines. People move products internationally,

and this is exactly what these cases are. These are networks of

criminals that are working domestically. They are working internationally. They are moving money. It takes technical expertise.
29 

The notion that it is not a local jurisdiction—sure, there is local

jurisdiction. You can make local jurisdiction on these cases because

part of the crime is committed locally. You can make Federal jurisdiction on these crimes, and obviously, somehow, we are finding jurisdiction in all these agencies.

Now, I am kind of yelling at you guys and you are not the ones

to yell at, but who should I be yelling at that no one appears to

be making this a priority? Thousands and thousands of people are

being ripped off and we are good enough in America to catch these

guys and we are not catching them, because I think, frankly, Special Agent, you have decided to do a good job on this and you just

decided you were going to keep pulling that thread until you got

a live one, but I do not think there are very many of you. You may

be the only one that has actually cared enough to try to pull the

thread and arrest people.

Can you guys explain to me why there is not someone that we

can hold accountable for the fact that these people, this pastor who

made a complaint, and all this money is disappearing and it does

not appear that, writ large, law enforcement in this country cares

much. 

Ms. ERICHS. May I respond to this?

Senator MCCASKILL. Absolutely.

Ms. ERICHS. I just would like to be clear and go back if I—I do

not think I said it earlier, that TIGTA did participate in the investigation with us, so they were very much involved in the success

of that particular case that I had mentioned.

I would also like to clarify that that is just one type of scam.

What we are looking at is they can call and represent themselves

to be anything. Again, it could be an IRS agent. It could be a U.S.

Attorney’s Office official. It could be a Customs official. It could be

a lottery sweepstakes winner. It is just the idea itself of that contacting folks by phone and telling them that they need to pay

money to either collect their winnings or avoid being charged is the

underlying principle here that we need to address, number one, especially mainly through outreach and education to stop the money

from ever going.

What we do is we are in the business of trying to either stop that

money at any point before it leaves the United States and gets into

their hands, and there are multiple opportunities for us to do that,

and again, we do have the unique authority to do that, but we do

partner with many Federal, State, and local agencies in order to do

that—— 

Senator MCCASKILL. Well, then why have we not arrested anybody?

Ms. ERICHS. We have actually had a significant number of arrests. We have initiated——

Senator MCCASKILL. On these IRS scams?

Ms. ERICHS. Well, that is what I am saying. It is a new—it is

a newer scam, but——

Senator MCCASKILL. It is not. It has been around since 2013.

That is like saying heroin is coming across the border and we are

going to wait two years before we lock anybody up.

Ms. ERICHS. It is also—well, it is one that can develop from another ongoing scam, so they may say they are a lottery sweepstakes
30 

winner, and then the next thing you know, the IRS is calling them

to pay the taxes on their lottery winnings, so we see sometimes a

development of these cases where they will go into it.

We have initiated a task force in Miami, in the Miami area, to

make an operations link to telemarketing, but mainly we are doing

this is because what we are seeing is that the organizations are

overseas and the money is eventually going overseas. You do have

domestic cells. You do have anywhere from your smaller group——

Senator MCCASKILL. Right.

Ms. ERICHS [continuing]. of operators to a larger group of operators, but our goal is to get the biggest fish possible, and again, in

this case, we were fortunate enough that we were able to act on

it. We also try to, even before we are notified of a crime, if we along

with our partners at U.S. Postal Inspection Service do——

Senator MCCASKILL. I forgot Postal. Postal is in this, too.

Ms. ERICHS. Yes.

Senator MCCASKILL. That is another one.

Ms. ERICHS. If we do currency operations, we can try to detect

outbound currency going to Jamaica by flight, by cruise ship,

through the mail, express mail——

Senator MCCASKILL. How many task forces like the one in Miami

exist in the country?

Ms. ERICHS. I would have to get back to you with an exact number from each office.

Senator MCCASKILL. I would like to know that. I would like to

know how many inter-jurisdictional task forces there are on these

scams, and this is the number one scam for IRS in the country

and—— 

The CHAIRMAN. In its history.

Senator MCCASKILL. In its history, and this is a powerful scam,

and there is a reason it is so effective, is people are scared to death

of the IRS, so I want to know how many inter-jurisdictional task

forces there are out there and why this is not gelling more quickly

within the law enforcement community, and, unfortunately, you

are really the only one in law enforcement that I can get my hands

on right now, but believe me, I am going to keep trying, because

this is really pretty outrageous that we do not have more of a clarion call within law enforcement to make this a priority.

Thank you, Madam Chairman.

The CHAIRMAN. Thank you very much.

Commissioner, did you want to add anything?

Ms. BRILL. I agree that this is a terrible scourge and I applaud

your continuing effort in this area. We have seen impostor scams

that are a little bit broader than just IRS. There are cases where

the scam artists pretend to be from the Department of Justice, as

you mentioned. We filed one case where a company—an entity

claimed that they had an affiliation with the Federal Debt Commission—it does not exist—the Federal Mortgage Marketplace, Federal

Enrollment Center, Federal Assistance Program, Federal Modification Assistance, and Federal Mortgage Counseling. We see a lot of

this, particularly with respect to mortgage assistance and credit repair. It is a real problem.
31 

The IRS impostor scams have this extra layer, as we have all

been talking about, that really frightens consumers, and I just applaud your continuing efforts here.

The CHAIRMAN. What I want to make very clear, as I associate

my comments with my colleague’s, is that it is so frustrating for

the average consumer, the average victim. Once they realize that

they have been a victim, they do not know where to go. Thank

goodness, my constituent went to her local police department, and

thank goodness she ran into Detective Moore, who really cared

enough to instantly go after it and was able to halt part of the wire

transfer, but from what I heard from the Pastor today, he still has

not heard back from anyone in Federal law enforcement who is

going after anybody to try to get his money back.

I think that you cannot—most people have not heard of TIGTA.

I mean, TIGTA, the Treasury Inspector General for Tax Administration—that does not come trippingly off the mouths of—out of the

mouths of most of my constituents or constituents throughout

America. 

Senator MCCASKILL. Or Senators.

The CHAIRMAN. Most Senators, even, yes. In fact, I bet if we did

a survey——

Senator MCCASKILL. Nobody would know what it is.

The CHAIRMAN [continuing]. nobody would know what it was,

and would not know to go there, so I think the educational campaign needs to be broadened beyond prevention to say, what do you

do if you think you are a victim.

I, too—I am so impressed that Special Agent in Charge Erichs

went after these individuals, and I was amazed that ICE did that

kind of thing, and I thought I knew a fair amount about ICE, but

again, that is not who you would expect.

When we are talking about crimes that are originating in India,

the Auburn Police Department, talented though it is, is not going

to be able to pursue that kind of case, other than trying to halt the

transfer in the first place.

I think we need a concerted effort by the Department of Justice,

working with its partners in law enforcement across the Federal

Government and at the State and local levels, and the FTC and the

more educational agencies, to ensure that consumers know what to

do, and the way we were able to really crack down on the Jamaica

lottery scam was when, through pressure from this Committee, the

Department of Justice finally started arresting people and extraditing people and making it clear to the Jamaican government that

this was not going to be tolerated, and I, personally, was about to

lead a boycott of tourists going to Jamaica until they changed their

law, and they changed their laws.

We really need more of an effort in this area, and I hope that

you will help us figure out what should be done.

Again, I want to thank my Ranking Member, Senator McCaskill,

who you can tell was a whale of a prosecutor, for all of her insight

and support and expertise, and thank you both for testifying today.

Ms. ERICHS. Thank you.

Ms. BRILL. Thank you.

The CHAIRMAN. I would like to thank all of our witnesses for testifying today. I hope that this hearing has helped to inform and
32 

protect Americans from ruthless scams, but most notably the one

that we have focused on today, the IRS impostor scheme. Each of

you has provided us with a valuable perspective and we want to

make sure that we do pursue what I see as the two remedies:

Greater public education so that people can avoid becoming victims

in the first place, but far, far more aggressive investigation and

prosecution of these criminals who are ripping off blameless people

and using the name of the Federal Government to do so. That is

one reason that they are so successful.

Again, I want to express my extraordinary frustration and, indeed, anger at the Department of Justice for failing to cooperate

with this Committee and to testify today. That is not something

that we are going to tolerate, and I think you saw today that there

will be unanimous outrage from this Committee if that lack of cooperation continues.

The Committee members and any members of the public will

have until Friday, April 24th, to submit testimony, statements, or

questions for the record.

Again, thank you all for being here today.

This hearing is now adjourned.

[Whereupon, at 3:12 p.m., the Committee was adjourned.]
APPENDIX 

Prepared Witness Statements

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Statements for the Record

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