DENVER - Three state agencies are jointly investigating allegations of tax benefits theft and unemployment insurance fraud.
The allegations came to light last November, when the Colorado Department of Labor and Employment and U.S. Department of Labor met with the Colorado Bureau of Investigation and asked for assistance getting to the bottom of an unemployment insurance and tax benefits scam.
The state Dept. of Revenue identified a group of suspects who they claim had been filing fraudulent tax returns.
DOR provided investigators with a list of 116 fraudulent tax returns believed linked to the suspects.
Court documents obtained by 7NEWS allege that the suspects approached various individuals in social situations and offered to file their tax returns.
The documents state that ring members took photos of the customers' W-2 forms and Social Security numbers, and then used them to file fraudulent returns.
The documents also allege that some unemployment insurance claims were based on false W-2 forms from “shelf” or non-functioning businesses.
7NEWS found that the non-functioning businesses were registered with the Secretary of State’s office in January 2013. Two of them, Charizma Beauty Salon and Joy House Daycare, list to an apartment at 29th and Arapahoe. A woman inside the apartment declined to answer the door and told the 7NEWS crew to leave.
A third business, Mi Popito, lists to an apartment at 52nd and Sherman. The 7NEWS crew found a light on inside the apartment, but no one answered the door.
The fourth business, Piglet’s Soul Food lists to an apartment on the 4500 block of Mariposa Way.
A woman inside said she knew nothing about the allegations contained in the affidavit.
When asked if she knew the woman who allegedly offered to do taxes, she replied, “I could.”
All three apartments are believed to be owned by the Denver Housing Authority.
DHA Community Affairs Officer Stella Madrid told 7NEWS they won’t confirm whether a specific address is part of their property. She added that while tenants can ask for permission to operate a business out of their homes on DHA property, their requests are usually denied because of concerns about liability.
Investigators allege that the theft ring has attempted to steal $70,838 in tax benefits, with an actual loss of $2,632.
They also allege that the ring has stolen $50,730 in fraudulent unemployment insurance claims.