The Internal Revenue Service’s Criminal Investigation Division issued a warning Thursday about a new wave of COVID-19 scams tied to the latest round of stimulus payments, especially targeting taxpayers in the District of Columbia.
The warning comes amid heightened tension in Washington after a riot last week at the Capitol that left five people dead and scores of people injured and led to an unprecedented second impeachment of President Trump on Wednesday. Washington is also bracing for possible protests next week around the time of the inauguration of President-elect Biden. National Guard troops have amassed at the Capitol to protect it.
The new COVID-19 scams echo some of the same schemes seen last year when the previous round of Economic Impact Payments was sent to taxpayers. However, in the last several months, the IRS’s CI unit said it has seen a variety of EIP scams and other financial schemes with the goal of stealing money and personal information from taxpayers. Criminals are taking advantage of the second EIP round, along with the impending tax-filing season, to trick honest taxpayers out of their money.
Martin Lowy, a former banking attorney, is the author of the books “High Rollers: Inside the S&L Debacle” and “Debt Spiral: How Credit Failed Capitalism.”
The Honorable Eugene A. Ludwig, the 27th comptroller of the currency, is a business and civic leader and expert on banking, regulation, risk management and fiscal policy. Mr. Ludwig is managing partner of Canapi Ventures, a venture capital firm focused on investments in early to growth-stage fintech companies, and CEO of Ludwig Advisors, which counsels financial firms on critical matters. He is the founder and former CEO and chairman of Promontory Financial Group, where he was an IBM executive after the firm was acquired in 2016. He is also the founder and former CEO and chairman of Promontory Interfinancial Network (now IntraFi Network), an early fintech company with approximately 3,000 bank members. Under his leadership, the Promontory family of companies became synonymous with excellence in compliance, risk management and financial services innovation.
In 2019, Mr. Ludwig founded the Ludwig Institute for Shared Economic Prosperity, or LISEP, a nonprofit organization dedicated to improving the economic well-being of middle- and lower-income Americans. Its research includes new economic indicators for unemployment, earnings and cost of living. LISEP's statistics aim to provide policymakers and the public a more transparent view into the economic situation of all Americans as compared with traditional metrics. He co-founded the Carol and Gene Ludwig Family Foundation, which provides grants to organizations that accelerate medical and scientific discovery in neurodegenerative diseases and enable access to educational and economic opportunity for young people.
Mr. Ludwig was previously vice chairman and senior control officer of Bankers Trust New York Corp., then the fifth largest U.S. banking organization. He was instrumental in steering the firm through its landmark merger with Deutsche Bank.
As comptroller from 1993 to 1998, Mr. Ludwig served as the Clinton administration's chief banking regulator and point person on the policy response to the credit crunch of the early 1990s. He fashioned an 11-point plan that was instrumental in ending the crunch and helping banks begin to lend again and fulfill their role of supporting the economy. He modernized and revised the bank regulatory framework, leading a multi-agency effort to overhaul the Community Reinvestment Act. Under his purview, lending to low- and moderate-income Americans increased tenfold, as did national bank investments in community development corporations. He brought the first fair-lending case in the nation and over the course of his leadership, 27 cases in all, resulting in tens of millions of dollars in fines against violators.
While he was comptroller, Mr. Ludwig served as chairman of the Federal Financial Institutions Examination Council, a member of the Basel Committee on Banking Supervision, a director of the Federal Deposit Insurance Corporation and chairman of the Neighborhood Reinvestment Corporation.
Mr. Ludwig was previously a partner at Covington & Burling, specializing in banking law. He has been a guest lecturer at multiple colleges and universities, including Yale and Harvard's law and business schools and Georgetown's International Law Institute.
Given his unique perspective as a regulator, lawyer, banker, business leader and trusted advisor to leading financial institutions, he is a sought-after thought leader. His pieces have been published in The Financial Times, The New York Times, The Atlantic, The Wall Street Journal, The Washington Post, Politico, Democracy Journal, American Banker, Time, Newsweek, Bloomberg, and on CNBC.com. His book, "The Vanishing American Dream," was published in September 2020.
Gene was born in Brooklyn, New York, and raised in York, Pennsylvania. He graduated magna cum laude from Haverford College and received a scholarship to Oxford University, where he earned a Master of Arts degree as a Keasbey Fellow. He earned a J.D. from Yale University, where he was editor of the Yale Law Journal and chairman of Yale Legislative Services.
“IRS-CI wants to make sure all residents of the District are aware of the potential scams to help prevent them from becoming victimized,” said Kelly R. Jackson, special agent in charge of IRS-CI's Washington, D.C., Field Office, in a statement. “Please stay vigilant of potential scammers looking to steal your personal information and your money.”
Some of the common COVID-19 scams seen by IRS-CI agents include:
- Text messages asking taxpayers to disclose bank account information under the guise of receiving the $1,200 EIPs;
- Phishing scams using email, letters and social media messages with key words such as “coronavirus,” “COVID-19” and “stimulus” in different ways — these communications are sent to large numbers of people and aim to access personally identifying information and financial account information (including account numbers and passwords);
- The organized and unofficial sale of fake at-home COVID-19 test kits (along with offers to sell fake cures, vaccines, pills and professional medical advice regarding unproven COVID-19 treatments);
- Fake donation requests for individuals, groups and areas heavily affected by COVID-19;
- Bogus opportunities to invest in companies developing COVID-19 vaccines while promising that the “company” will dramatically increase in value as a result.
Taxpayers who get unsolicited emails or social media attempts to gather information that appear to be from either the IRS or an organization closely linked to the IRS should forward the message to phishing@irs.gov. The IRS is encouraging them not to communicate with potential scammers online or over the phone.
