IRS agent goes after willful cheats [The Philadelphia Inquirer]
(Philadelphia Inquirer (PA) Via Acquire Media NewsEdge) Aug. 26--During an IRS investigation in the early 2000s, Agent Shantelle Kitchen went to a used-car dealership in Delaware, posing as the girlfriend of a drug dealer.
Armed with a concealed service weapon and wearing a wire, she chatted with the target, who was suspected of selling cars to criminals for large sums of cash and then not reporting the income to the IRS.
Kitchen made clear she was there to buy a car for her boyfriend with his drug money, and she waited for the man to flinch.
When he didn't, she handed over $30,000 in cash and drove off in a Jaguar. Forty-five days later, when the business hadn't reported the cash income as required by law, the man was arrested. He and a group of drug dealers pleaded guilty to charges stemming from the joint IRS-Drug Enforcement Administration investigation.
It's not the kind of workday typically associated with an IRS agent. The more familiar scene, Kitchen jokes, is a windowless room of people poring over stacks of folders and forms.
Kitchen, 45, is special agent in charge of all New Jersey IRS criminal investigations, with offices in seven locations including Cherry Hill, Mays Landing, and Trenton. The small arm of the IRS handles criminal tax evasion, money-laundering, housing and mortgage fraud, cybercrimes, identity theft, and narcotics cases.
"Most people commit crimes for money, and that will affect the tax return," Kitchen said. "So we are involved in tons of crimes. We have some of the best financial investigators in the world. We know how to follow the money."
Kitchen oversees more than 80 agents in the seven New Jersey offices. Since she took the helm in October, the unit has dealt with a record high number of identity-theft cases and the highly publicized investigation of Joe and Teresa Giudice, of Bravo's reality-TV show The Real Housewives of New Jersey. The couple pleaded not guilty earlier this month to financial-fraud charges. A trial date is set for Oct. 8.
Nationally, criminal investigators make up just 4 percent of the 95,0000 IRS employees. Their job is to investigate criminal tax violators -- people who knowingly break the law, not those who make mistakes on their tax returns.
"The difference between what we do and a civil audit is willful intent. We look at patterns of behavior determined over time," Kitchen said last week in the IRS Cherry Hill office. "We don't prosecute people who got confused."
Kitchen, a North Philadelphia native and daughter of State Sen. Shirley Kitchen (D., Phila.), started working for the IRS 26 years ago as a 19-year-old Temple finance student. She graduated from Julia R. Masterman High School and has remained an avid Philadelphia sports lover. She attributes her success to her mother, who she says piqued her interest in public service.
Shirley Kitchen, who has served four terms in Philadelphia's Third Legislative District, called her daughter, who is one of five, a compassionate leader, a stickler for the rules, and a math whiz. The senator, who has championed the need for public-assistance programs, emphasized the importance of defending the tax system financing those programs.
"Every time you pick up a newspaper, you read a story" about tax evasion, Shirley Kitchen said. "It's not a victimless crime. I can actually see its effect. So many programs have been cut that help people pull themselves up."
Before becoming head of New Jersey's IRS criminal investigations team, Shantelle Kitchen worked as an IRS field agent from 1995 to 2004 in Philadelphia and then as assistant special agent in charge from 2010 to 2012 in New York City.
She was chief during the investigation into federal informant Solomon Dwek, who was sentenced in 2012 to six years in prison for bank fraud and money-laundering, and she also supervised the case of three doctors who admitted accepting tens of thousands of dollars in bribes from Biodiagnostic Laboratory Services of Parsippany in exchange for referring their business.
The most common scheme Kitchen's agents see today is identity theft, which has quadrupled nationwide since 2010. Criminals who have hacked into credit cards and bank accounts now fraudulently file other people's tax returns.
"It bombarded us in the last three to four years. It's a shame for the victim because it takes a long time for them to correct the account with the IRS. A lot of times," she said, "they don't get the refund they're entitled to because it's been stolen."
In 2010, the IRS had 224 identity-theft cases nationwide. That number shot up to 898 last year, and so far in 2013, the agency has had 542 cases, according to agency data.
On Friday, a Paterson mail carrier was sentenced to three years in federal prison for providing addresses on his route to men who stole more than $390,000 by filing fraudulent tax returns.
The unit has the highest conviction rate of any federal agency, 90 percent, which shouldn't be surprising, said Agent Robert Glantz, a spokesman.
"We deal in documents," Glantz said, "and documents don't lie."
Publicizing those convictions, as well as highly watched cases such as the Giudice case, educate the public about the consequences of criminal tax evasion, Glantz said.
A challenge for Kitchen is determining which cases to investigate. The unit had a slight decrease in manpower due to retirements and a three-year hiring freeze.
The history of the unit dates to 1919, when six U.S. post office inspectors made up the entire team. By the 1930s, IRS criminal investigators had become nationally renowned for the conviction of Al Capone and were credited with helping to solve the Lindbergh baby kidnapping.
Today, agents train in the language of HTML, Internet service providers, and global file sharing.
But determining who is behind a multilayered scheme still typically falls to traditional detective methods.
"In the end, even with all the technology and all the devices, you still have to go out on the street and do surveillance, do trash runs," Kitchen said. "It's often the only way to find out, did this person do this intentionally?"
Contact Julia Terruso at 856-779-3876, email@example.com, or follow on Twitter @juliaterruso.
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