Wisconsin Resident, Cutris Pethley Involved in Nigerian Identity Theft and Tax Fraud Scheme
Curtis Sherman Pethley, 62, a resident of Wisconsin, was sentenced today to 57 months in federal prison and ordered to pay more than $440,000 for his role in a nationwide conspiracy to commit mail fraud and aggravated identity theft.
According to court documents, IRS-Criminal Investigation began a lengthy investigation into the fraud scheme when, in May 2013, a victim in Medford, Oregon notified the IRS that false federal and Oregon state tax returns were filed electronically using her and her husband’s personal identifying information including their social security numbers and dates of birth.
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IRS determined the scheme required co-conspirators to amass a large supply of stolen U.S. taxpayer identities; obtain IRS filing PINs using victim identities; acquire prepaid debit cards in victims’ names; use fictitious email addresses; file fraudulent tax returns and conceal refund proceeds by wiring cash to Nigeria. Fraudulent tax returns were filed using the identities of thousands of Oregon and Washington taxpayers. In total, the scheme lasted several years and netted co-conspirators more than $11.6 million in fraudulent tax returns.
Pethley, working along with his Nigerian contact, acquired numerous debit cards for use in the scheme including the card connected with the Medford, Oregon victim. He helped his Nigerian contact by providing information about the preparation of federal income tax returns including how to calculate withholdings on a W-2 form. Pethley withdrew fraudulent tax refunds from the prepaid debit cards and, after taking his 10 to 20 percent cut of the proceeds, wired the money to Nigeria. In addition, he used refund proceeds to purchase merchandise and money orders and sent them to co-conspirators throughout the U.S. as instructed.
When IRS agents executed a search warrant on Pethley’s residence, they discovered approximately 150 prepaid debit cards and seized numerous money orders totaling nearly $50,000.
Pethley previously pleaded guilty to three counts of mail fraud, conspiracy to commit mail fraud and aggravated identity theft on August 27, 2018. He is currently serving a separate 60-month federal prison sentence for distributing child pornography in a case from the Western
District of Wisconsin. The Court ordered that 37 months of Pethley’s Oregon sentence should run consecutively to the sentence he is currently serving.
This case results from a joint investigation by IRS-Criminal Investigation, the U.S. Department of Health and Human Services Office of Inspector General, the Federal Bureau of Investigation, and Homeland Security Investigations with support provided by the Department of Treasury, Inspector General for Tax Administration, the U.S. State Department, and the Oregon Department of Revenue Policy and Systems Unit and was prosecuted by Byron Chatfield and Gavin Bruce, Assistant U.S. Attorneys for the District of Oregon.
