SC reports more inmate tax fraud than larger states

SC reports more inmate tax fraud than larger states

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by STUART WATSON / NBC Charlotte

Bio | Email | Follow: @stuartwcnc

WCNC.com

Posted on February 25, 2013 at 6:12 PM

Updated Tuesday, Feb 26 at 11:48 AM

SOUTH CAROLINA -- Inmates in South Carolina prisons filed more than 3,000 fraudulent tax returns for the last year on record, the sixth most of any state reporting in the US.

It’s hard to say from the 2010 IRS report to Congress whether the tax fraud scheme is more prevalent in South Carolina, or whether Corrections officials just catch it more often in the Palmetto state. But South Carolina prisons report more tax fraud than larger states like Ohio, Arizona and Texas.

The Inspector General for South Carolina’s Department of Corrections, Jerry Adger, says the department is closely examining inmate mail to try to crack down on tax fraud.

“I hope it doesn’t happen on my watch,” says Adger, who has served at the department for about a year and a half, “And I would hope that they've made the necessary changes to prevent that from happening now.”
 
Adger says Treasury Department refund checks would raise a red flag these days in inmate mail. “It would raise a red flag even it it weren’t a whole bunch,” he said.
 
A former inmate from South Carolina prisons, Dwayne Selvey, testified before the Oversight subcommittee of the House Ways and Means committee in June of 2005 and recently told the NBC Charlotte I-Team how he spent refund checks on “shoes, TV’s, clothes and plenty of marijuana” while he was an inmate.

Adger says he does not believe marijuana use is as prevalent in SC prisons since smoking tobacco was banned.

Selvey said inmates who received refund checks occasionally gave small gifts to correctional officers. “We made sure they had plenty of coffee and honey buns,” Selvey said.

But Adger says inmates are forbidden from buying even small items at the canteen or the commissary for correctional officers and staff.
 
Inmate tax fraud is a federal crime but while Adger says he has met with the FBI, US Marshal's and Sheriffs to discuss ways to combat crime, he has yet to meet IRS criminal investigators face-to-face to discuss fighting tax fraud.

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