Clever, other than the getting caught bit

[Demosthenes]

Vegas Broker Admits He Impersonated IRS Agent
Las Vegas (Oct. 6, 2008)
By WebCPA staff

| A Las Vegas man who worked as a real estate broker in Nevada since the late 1970s has pleaded guilty to felony tax evasion and impersonating an IRS agent.

Michael J. Sabo pleaded guilty on Sept. 29, 2008, before U.S. District Judge Roger L. Hunt to false impersonation of an officer or employee of the United States and tax evasion. He owed approximately $95,000 in federal income taxes for 1994 through 1998.

In 2004 and 2005, Sabo pretended to be an IRS agent and signed and filed with the Clark County Recorder's Office three fraudulent lien releases for tax liens the IRS had placed on real property he owned in Henderson, Nev., according to the Justice Department. Because of his actions, the three tax liens, totaling approximately $97,000, were released from the property. In September 2005, Sabo sold the property, thereby avoiding tax payments. He also transferred most of the proceeds of the sale to a nominee. Sabo's real estate broker license expired in August of this year and has not been renewed.

Sentencing is scheduled for Jan. 9, 2009. Sabo faces up to three years in prison and a $250,000 fine on the impersonation charge and up to five years in prison and a $250,000 fine on the evasion charge. The case was investigated by the IRS Criminal Investigation and the Treasury Inspector General for Tax Administration, and prosecuted by Assistant U.S. Attorney Brian Pugh.

[webhick]

In 2004 and 2005, Sabo pretended to be an IRS agent and signed and filed with the Clark County Recorder's Office three fraudulent lien releases for tax liens the IRS had placed on real property he owned in Henderson, Nev., according to the Justice Department.

I would be interested to know if agents show up to release liens or if it's typically done electronically. Also, did this guy merely say "Hi! I'm from the IRS and I need to remove some liens" or did he actually have a fake id? Henderson doesn't look like a small town where not asking for ID is pretty common, but being a city doesn't mean they have the sense to ask.

[Mr. Mephistopheles]

In 2004 and 2005, Sabo pretended to be an IRS agent and signed and filed with the Clark County Recorder's Office three fraudulent lien releases for tax liens the IRS had placed on real property he owned in Henderson, Nev., according to the Justice Department.

I would be interested to know if agents show up to release liens or if it's typically done electronically. Also, did this guy merely say "Hi! I'm from the IRS and I need to remove some liens" or did he actually have a fake id? Henderson doesn't look like a small town where not asking for ID is pretty common, but being a city doesn't mean they have the sense to ask.

One the one occasion where I met with an IRS, the first action by the agent was an introduction and display of credentials. One would think the agent would present credentials when appearing in an official capacity in a public office. Then again, as you state, they may not have been wary enough to ask.

[The Observer]

In 2004 and 2005, Sabo pretended to be an IRS agent and signed and filed with the Clark County Recorder's Office three fraudulent lien releases for tax liens the IRS had placed on real property he owned in Henderson, Nev., according to the Justice Department.

I would be interested to know if agents show up to release liens or if it's typically done electronically. Also, did this guy merely say "Hi! I'm from the IRS and I need to remove some liens" or did he actually have a fake id? Henderson doesn't look like a small town where not asking for ID is pretty common, but being a city doesn't mean they have the sense to ask.

One the one occasion where I met with an IRS, the first action by the agent was an introduction and display of credentials. One would think the agent would present credentials when appearing in an official capacity in a public office. Then again, as you state, they may not have been wary enough to ask.

Usually lien releases would be sent either electronically or by mail from the IRS. The IRS can record the lien releases in person - but you do not have to be a IRS employee to record a lien release. Taxpayers who have received a lien release document from the IRS can record it themselves. This typically happens because the taxpayer is in a hurry to get the release recorded (before they apply for a loan, or perhaps a job where the lien would be discovered on a background investigation) and does not want to wait for the IRS to record it.

I do not know if the recorders' offices have a legal obligation to certify every document that comes in or to check for the identity of the person recording a particular document. I would venture that expecting a clerk to recogize when a particular document is phony would be unrealistic. And trying to figure out whether a particular person has a right to record a document would be time-consuming as well.

But putting that aside for the moment, Mr. Sabo was foolish in pretending to be a IRS agent recording the releases. Since taxpayers have the ability to record the releases themselves, he could have identified himself as the taxpayer recording the releases from the IRS on his own behalf. I doubt that the recorder's clerks would have objected - and Sabo would have at least avoided the charges of impersonating a federal officer.

[webhick]

But putting that aside for the moment, Mr. Sabo was foolish in pretending to be a IRS agent recording the releases. Since taxpayers have the ability to record the releases themselves, he could have identified himself as the taxpayer recording the releases from the IRS on his own behalf. I doubt that the recorder's clerks would have objected - and Sabo would have at least avoided the charges of impersonating a federal officer.

Thanks for the info. The guy is pretty stupid to impersonate a federal officer for something that didn't require it. It sounds to me like if he were going to fraudulently have his liens released, he'd forge the lien release document - using a real one as a baseline. He'd still get busted, but at least we wouldn't be calling him stupid. Oh wait, we would - because forgery is pretty dumb as well.

It'd be cool if there was a lien release hotline where once a lien release document were generated, you could call up an 800 number, key in an ID# on the document and it would spit back the taxpayer's name, the applicable tax year, and the affected property - you know, as a way to verify validity.

[Burzmali]

Any bets that after the IRS whacks this guy with a hammer, they do absolutely nothing to plug the hole this guy exploited to have his liens released?

[webhick]

Any bets that after the IRS whacks this guy with a hammer, they do absolutely nothing to plug the hole this guy exploited to have his liens released?

I agree, I doubt the IRS has the inclination or the authority to spackle.

[Quixote]

It sounds to me like if he were going to fraudulently have his liens released, he'd forge the lien release document - using a real one as a baseline.

I suspect that is what happened. As noted, anyone can file a lien release with the clerk. It is therefore unlikely that the clerk's office would ask for ID. So it is doubtful that Sabo had an opportunity to misrepresent his identity to the clerk. In signing the lien release, however, he had misrepresent himself.

[The Observer]

Any bets that after the IRS whacks this guy with a hammer, they do absolutely nothing to plug the hole this guy exploited to have his liens released?

Could you please explain what the loophole is and what the IRS could do to plug it? Before you answer, remember the following facts:

(1) The IRS is an executive agency and has no legislative powers,

(2) The local recorder offices are not under the control or direction of the IRS, they set their own rules, policies and/or guidelines on how documents are recorded, the IRS cannot dictate that the recorder needs to verify the accuracy of the document, the identity of the person, or their authority to record such a document.

(3) The IRS has no ability to monitor the hundreds of thousands of documents that get filed every day in the thousands of recorders' offices that exist; some of these offices have no ability to transmit or receive documents electronically and therefore documents either arrive by mail or are delivered in person.

(4) The IRS is requred by law to record notices in the local recorder office in order to perfect the government's equity interest in taxpayer assets where the property is located. (There is a proposal in Congress about changing the laws so as to create a central recording office specifically for notices of federal tax liens which would "plug" the whole, but that is something that the IRS has no power to mandate or create.)

[Demosthenes]

The Sabo indictment:

http://www.cheatingfrenzy.com/sabo107.pdf

[webhick]

Looks like The Observer and Quixote hit the nail on the head. The applicable portion of the indictment:

18. On or about August 31, 2004, defendant SABO filed, and caused to be filed, with the Clark County Recorder's Office a fraudulent document purporting to be a "Release of Notice of Federal Tax Lien" wherein defendant SABO claimed to be an authorized agent of the IRS. The filing of the Release of Notice of Federal Tax Lien caused the Clark County Recorder to remove the IRS Notice of Federal Tax Lien dated April 18, 1997.

Lather, rinse, repeat a few more times

[The Observer]

It sounds to me like if he were going to fraudulently have his liens released, he'd forge the lien release document - using a real one as a baseline.

I suspect that is what happened. As noted, anyone can file a lien release with the clerk. It is therefore unlikely that the clerk's office would ask for ID. So it is doubtful that Sabo had an opportunity to misrepresent his identity to the clerk. In signing the lien release, however, he had misrepresent himself.

I had overlooked that - I agree that he was convicted based on his forging the signature on the release document. I doubt that he ever presented ID to the recorder's office and that it was highly unlikely that he was asked to present ID.

I am aware of another person who was convicted for forging an IRS levy release, but they were able to plead it down to a federal misdemeanor (illegal use of IRS symbols).

[The Observer]

Looks like The Observer and Quixote hit the nail on the head. The applicable portion of the indictment:

18. On or about August 31, 2004, defendant SABO filed, and caused to be filed, with the Clark County Recorder's Office a fraudulent document purporting to be a "Release of Notice of Federal Tax Lien" wherein defendant SABO claimed to be an authorized agent of the IRS. The filing of the Release of Notice of Federal Tax Lien caused the Clark County Recorder to remove the IRS Notice of Federal Tax Lien dated April 18, 1997.

Lather, rinse, repeat a few more times

Actually, I missed the nail by a mile - I was assuming that he had altered a lien release document that already had an electronic signature on it and thus had avoided putting a signature on it himself in his own writing. In my book that would have been a forgery anyway since he would have constructively caused the title search to have relied on the release as an authentic document.

[The Observer]

Now see, if he had written a book and held seminars at the local Hometown Buffet about this new approach to defeating the IRS.........

It's an old approach - and can come to light very quickly if the IRS is looking for the notice of recordation to bear some immediate fruit - or the title company is doing a diligent search and wants to verify what they are seeing. During escrow it is not unusual for the title company to request an escrow demand from IRS for certain periods that they may have suspiscions about. If that happens, the game is up.

But it appears that isn't what happened in Sabo's case since he was able to receive the money from the properties and I suspect his expertise in the real estate field allowed him to understand what he had to accomplish to pull this off and make it look real.

[Burzmali]

Any bets that after the IRS whacks this guy with a hammer, they do absolutely nothing to plug the hole this guy exploited to have his liens released?

Could you please explain what the loophole is and what the IRS could do to plug it? Before you answer, remember the following facts:

(1) The IRS is an executive agency and has no legislative powers,

However, it has friends that do, and they often get what they want when they ask nice.

(2) The local recorder offices are not under the control or direction of the IRS, they set their own rules, policies and/or guidelines on how documents are recorded, the IRS cannot dictate that the recorder needs to verify the accuracy of the document, the identity of the person, or their authority to record such a document.

I'm sure if the IRS provided a method to much more accurately identify a release, many places would choose to adopt it.

(3) The IRS has no ability to monitor the hundreds of thousands of documents that get filed every day in the thousands of recorders' offices that exist; some of these offices have no ability to transmit or receive documents electronically and therefore documents either arrive by mail or are delivered in person.

Wow, so an agency that is set up to receive hundreds of millions of sliver of data each year including a sizable number of paper returns of all shapes and colors can't handle a few thousand a day more? Even if they were just return receipt style mailers?

That's the federal government in a nutshell. Leave the door wide open and complain when people walk through.

[The Observer]

However, it has friends that do, and they often get what they want when they ask nice.

The only "friends" that the IRS has is Congress - which is a tenuous "friendship" at best and tends to be a one-way friendship - and asking Congress to mandate that it interfere with thousands of local and state government agencies is rather a big favor to ask. It won't happen - which is one of the reasons why Congress is looking at legislating for centralized lien recordation instead.

I'm sure if the IRS provided a method to much more accurately identify a release, many places would choose to adopt it.

And I'm sure that many recorder offices are still going to say that their job and purpose is not to screen out what is a legitimate document and what isn't - regardless of what the IRS provides to them. If Sabo provided a document that was actually printed on an IRS release form (668-Z which isn't that hard to get hold of or properly duplicate in this day and age of digital wizardry) then providing instructions on how to identify a real release isn't going to help - it would have looked real to them in any event.

Wow, so an agency that is set up to receive hundreds of millions of sliver of data each year including a sizable number of paper returns of all shapes and colors can't handle a few thousand a day more? Even if they were just return receipt style mailers?

No, what I am saying is that the IRS would have to either:

• (a) arrange for each recorder's office to electronically transmit back a list of daily filings every day that came in as federal tax lien notices or releases and then go through comparing them to what was actually requested by an IRS employee. There are too many opportunities for errors to occur on both sides of the transmission here to even hope of achieving acceptable accuracy, let alone pulling the Sabo needle out of the haystack,
  
  (b) getting the recorder's office that doesn't have electronic capabilities to physically mail in copies of the releases that have been recorded and then hire IRS staff to physcially go through these notices, identify and match them up to see what is legit and what isn't
  
  or
  
  (c) having to physically check the recorder's office every day to ensure that no fraudulent lien releases were recorded. Meaning having to hire several thousand more IRS employees to do something to prevent the occasional fraudulent lien release attempt.

You really don't understand how immense the task is of trying to get several thousand recorder offices to agree to change how they do business and take on extra responsibility that is not mandated by their own legistators to perform. As an example some states passed rules on standards for document filing including the size and shape of recorded documents. They expected that the IRS should comply with these standards despite the fact that they had no legal authority to tell a federal agency that they would refuse to record a document that failed to meet their standards and that the standard varied from state to state - meaning that the IRS would have had to create separate lien recordation forms in order to accomodate each local variance.

That's the federal government in a nutshell. Leave the door wide open and complain when people walk through

.

You falling back on quoting Stevesy? If not, that is a rather knee-jerk response to a situation with which you have had no practical experience. Since there are rules and laws in place to deal with forging and impersonating federal employees, the door was not "left open"; rather Sabo decided to participate in "breaking and entering" despite knowing that he was in the wrong.

[webhick]

No, what I am saying is that the IRS would have to either:

You forgot option D, the lien hotline I mentioned earlier.

[The Observer]

No, what I am saying is that the IRS would have to either:

You forgot option D, the lien hotline I mentioned earlier.

It'd be cool if there was a lien release hotline where once a lien release document were generated, you could call up an 800 number, key in an ID# on the document and it would spit back the taxpayer's name, the applicable tax year, and the affected property - you know, as a way to verify validity.

Perhaps - lien releases are associated with the original lien certificate number and some other information that is part of the public record (now that SSNS/EINS are being omitted). You wouldn't get information about the affected property since that isn't something that appears on the normal lien notice (liens attach to everything that the taxpayer owns so there is no need for specifics). I have this nagging suspiscion that something about this procedure wouldn't work. I need to think about it more. One problem would be people understanding that a lien release recorded in New Jersey doesn't affect a lien recorded against the same taxpayer in Oklahoma.

[Judge Roy Bean]

The real gate-keeper is the title insurer. They should, if they already don't, have a contact phone number to verify local lien releases. I have personally seen one closing done with a faxed release form from the IRS and a quick follow-up call to double-check the authenticity.

[The Observer]

The real gate-keeper is the title insurer. They should, if they already don't, have a contact phone number to verify local lien releases. I have personally seen one closing done with a faxed release form from the IRS and a quick follow-up call to double-check the authenticity.

Are you saying that a title insurer could be held liable for not checking Sabo's lien releases independently of what they found at the recorder's offices?