Financial crimes don’t just happen on Wall Street. They’re common in Mississippi, said former Internal Revenue Service investigator Phil Hull.
Hull spoke to the Columbus Rotary Club at Lion Hills Tuesday where he talked about financial crime — fraud and identity theft — and brought up specific instances of criminal charges brought against fraudsters both in and outside Mississippi.
Hull conducted both civil and criminal investigations for the IRS for more than 25 years, working money laundering cases. He now works as a financial securities consultant with Financial Crimes Investigative, Compliance and Security, LLC, in Madison. He takes every opportunity to raise awareness of scams and other financial crimes that affect everyday people, he said.
“Every chance I can, I go around Mississippi and talk to groups like you guys just to tell you about some of the things that are out there,” he said.
Identity theft is one of the main financial crimes in Mississippi, Hull said. Criminals steal other people’s social security numbers, enter them on tax returns and turn in the returns in hopes of getting refunds — a common crime in low-income states.
“It’s like playing the lottery,” Hull said. “Sometimes they get it; sometimes they don’t.”
Hull specifically mentioned one case in Greenwood, Mississippi, in which a woman cashed tax refunds after filing tax returns with other people’s social security numbers. The Triple Stop, where she worked in Greenwood, caught her on camera and turned her in, Hull said.
“That was run on (Highway) 82 right here,” he said.
It can be difficult to protect social security numbers, Hull told The Dispatch after the meeting. Even cautious individuals who don’t give their social security numbers out can become victims because doctors, employers or companies still have it. Frequently people who steal social security numbers are those with access to medical files at doctors’ offices or are similarly poised to get personal information, Hull said.
But identity theft is not the only type of financial criminal activity Hull touched on. He talked about bribes and public corruption, too.
Hull mentioned former commissioner at the Mississippi Department of Corrections Christopher Epps, who was indicted on corruption charges in 2014 and later pleaded guilty. Hull also talked about the Ponzi scheme run by Gina Palasini, an Indianola native who has been investigated for scams targeting elderly nursing home patients and those trying to get Veterans Affairs and Medicaid benefits.
“In a nutshell, Palasini used clients’ — victims’ — life savings to make supposed interest payments to other clients … getting money from the new investors, paying the old investors,” Hull said. “That’s a Ponzi scheme.”
Palasini was charged with financial crimes in both state and federal cases, and her victims’ losses are believed to total about $2 million, Hull said.
And of course, financial crimes include the massive cases run through national banks. Hull opened his talk with a picture of Bernie Madoff, who in 2008 was charged with multiple counts of fraud and money laundering after being caught in the biggest fraud scheme in U.S. history. JP Morgan ended up paying a $2 billion fine for not reporting Madoff for suspicious activity.
That type of thing happens in Mississippi too, Hull said. In the early 2000s, Hull investigated Greenville securities dealer Victor Nance and Memphis, Tennessee attorney Louis Hamric, who ran their own Ponzi scheme through AmSouth Bank. Both were sentenced to multiple months in prison, and the bank was fined $50 million for not reporting the fraudsters’ suspicious activities.
“We weren’t investigating AmSouth Bank,” Hull said. “We were investigating the Ponzi scheme. But (the bank wasn’t) responding to federal grand jury subpoenas. They treated it like a civil case.
“At the time it was the largest bank case in history, and now we’re up to JP Morgan, Madoff, and $2 billion,” Hull said. “It’s all for failure to file suspicious activity reports. So it does happen in Mississippi.”
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