Mich. Inmate Runs Identity Theft Scam from Prison Cell

September 7, 2006

Mich. Attorney General Mike Cox announced this week that Dale Morris, 42, an inmate at the Hiawatha Correctional Facility in Kinross, Mich., was sentenced to five to 20 years in the Chippewa County Circuit Court by 50th Circuit Court Judge Nicholas Lambros.

Morris was convicted of maintaining a sophisticated criminal enterprise that he orchestrated from his Michigan prison cell. Morris’ scheme enlisted the help of two fellow Michigan inmates, Darius Moye and Richard Custer, their mothers, Mary Moye of Georgia and Linda Custer of Detroit, David Bullard of Inkster, and Sherry Drake of Detroit. The scheme involved the attempted use of thousands of stolen names and social security numbers, including several hundred stolen from the St. John’s Medical System in Detroit, to defraud Michigan taxpayers out of hundreds of thousands of state tax dollars. The hospital records were later seized in Georgia in Moye’s home.

“The sheer brazenness of this criminal enterprise is incredible,” Cox said. “I want to compliment the Michigan State Police and the U.S. Postal Inspectors for their help in investigating this scam and completing the work before the state of Michigan lost any money. I also want to compliment St. John’s Medical System for their cooperation and assistance in this investigation. The hard work and cooperation by all these offices helped keep our State’s taxpayers from being defrauded out of hundreds of thousands of their hard-earned dollars,” Cox added.

Morris, in prison as a 4th time habitual offender (convicted of 3 prior felony convictions), was the ringleader of the scheme to fraudulently obtain Homestead Property Tax refunds that were intended for low income renters. While in prison, Morris’ directed his co-conspirators to file hundreds of false homestead property tax claims with the Michigan Department of Treasury. These fraudulent filings, which used stolen names and social security numbers, claimed to be low income renters in Detroit. Hundreds of Michigan Treasury check “refunds” were in the process of being sent to various addresses in Detroit, many of which were non-existent, but all had a change of address form filed with the U.S. Post Office directing the checks to a Livonia P.O. Box. Incredibly, the P.O. Box was rented by Exarch Management Consultants, – which was incorporated by Morris while he was in prison.

U.S. postal carriers noticed the large number of Treasury checks going to the Livonia P.O. Box and alerted authorities. The Michigan State Police, U.S. Postal Inspectors, and the Michigan Attorney General’s Office unraveled the scheme quickly and charged all participants with Maintaining a Continuing Criminal Enterprise, a 20-year felony, and Filing False Tax Claims, a 5-year felony. When the defendants were arrested, thousands of additional tax claims were in the process of being filed. Had this fraud continued, the defendants would have defrauded the state of hundreds of thousands of dollars, according to Cox.

Source: Michigan Attorney General’s Office

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