Tax Scam Targets Minority Business Owners
The US Department of Justice and the IRS report that an illegal tax scam targets African-American business owners in several states including Texas, Oklahoma and Louisiana. The perpetrators allegedly offer to prepare and submit applications for federal minority-owned business grants. Then instead of filing the grant application, they file an amended tax return in the customer's name, seeking a tax refund based on claiming bogus tax credits, sometimes in excess of $40,000. The scammers charge a fee of several hundred dollars in addition to requiring customers to pay a percentage of any "grant" money they obtained. Customers were unaware that the scammer never submitted an application, but in fact committed tax fraud on the customer's behalf, in the customer's name. Businesses who have been approached or deceived by a similar scheme can contact the Attorney General's Office at 1-800-252-8011. |
ABOUT CONSUMER ALERTS - The Office of the Attorney General accepts consumer complaints about businesses. When a pattern of complaints warrants intervention, the Attorney General can file a civil lawsuit under consumer protection statutes, sometimes with the result that a company is required to pay restitution to consumers -- see our Major Lawsuits page. However, when a consumer is swindled by a con artist, filing a complaint cannot help. Civil litigation can sometimes put a very unscrupulous business out of action, but often cannot produce restitution.
Individual con artists generally fall under the jurisdiction of a criminal prosecutor -- in Texas, this is the district or county attorney. But even when they are charged and convicted, these individuals usually have spent the money as fast as they have stolen it. A person who is the victim of fraud should report the incident to the police or sheriff. But by far the best thing is for consumers to be aware of fraud, so they are not swindled in the first place. For this reason, the Office of the Attorney General posts these Consumer Alerts about possible scams and schemes that come to our attention through citizen contacts to our office or other sources.