Richard Russo has been a letter carrier for 13 years and knows the people who live on his route. He became suspicious when he started seeing one address getting multiple treasury checks with different names.
"I was delivering the mail and noticed the names did not match the people who lived at the house, " Russo said. "I started collecting the checks and brought them back to the office."
Now the U.S. postal service is investigating.
"This is an ID theft investigation that started off with perpetrators stealing or buying people's social security numbers, then file false W-2 forms to the victim attached to that social security numbers, " U.S. Postal Inspector Cheryl Swyers said.
Using that information, scam artists can file for a fraudulent tax refund. The U.S. treasury check has to be issued to a specific address, so thieves either pay an accomplice to pick up the check or pick it up themselves.
"Actually at one time every house on one street was getting one and they were all fraudulent names," Russo said.
According to investigators, thieves get the stolen IDs from black market lists or by bribing an employee with access to a big database. Inspectors say Puerto Rican residents appear to be a target.
"Puerto Rican residents are not required to fill out federal tax returns if they have not worked outside Puerto Rico within the last year. They are only required to fill out state returns," Swyers said.
Experts say the scam is easy to pull off - especially with electronic filing. The IRS does not cross-check all returns against employer payroll records before a refund is issued.
"One particular day I would have 10 checks, then 10 checks - maybe 20. In all I had 900-thousand dollars' worth of bogus checks, " Russo said.
(KUSA-TV © 2013 Multimedia Holdings Corporation)