IRS-CI Releases Annual Report on Financial Crime
The Internal Revenue Service (IRS)-Criminal Investigation (CI) unit recently released its annual report, which is a comprehensive look at investigations, prosecutions, partnerships and other actions related to tax and financial crimes enforcement throughout the fiscal year (FY).
According to the IRS-CI FY22 Annual Report, CI special agents conducted over 2,550 investigations, referred 1,837 cases for prosecution, obtained a 90.6 percent conviction rate on cases accepted for prosecution, and identified more than $31 billion from tax and financial crimes. The IRS-CI is the only federal law enforcement agency 100% focused on investigating financial crime.
Then-IRS Commissioner Chuck Rettig said in a statement upon the report’s release, "The cases the IRS-CI team investigated over the past fiscal year touch multiple continents and require cooperation with partners around the globe. This is why IRS-CI continues to cement itself as the preeminent law enforcement agency investigating financial crimes on a global scale.”
IRS-CI Chief Jim Lee said, “We seized record amounts of data and cryptocurrency, led some of the largest tax cases on record and spearheaded first-of-its-kind national and international initiatives aimed at developing and strengthening partnerships in the public and private sectors.”
According to the report, IRS-CI special agents spent roughly 70 percent of their time investigating tax-related crimes, with the remaining 30% of their effort going to money laundering and drug trafficking cases. Nearly $5.7 billion in tax fraud and $26.9 billion in other financial crimes was identified. And $7 billion in illicit proceeds were seized.
Another major focus for IRS-CI during the year was international cooperation, as partnerships were expanded around the world to fight tax and financial crimes. That included training officials in countries like Argentina, Germany, and Colombia, and apprehending tax fugitives in Mexico, after changes to a Mexican law that enabled the extradition of tax fugitives.
There was also an effort to cut down on cyber-crimes and crimes involving cryptocurrency. As an example, agents arrested Ilya Lichtenstein and his wife, Heather Morgan, for alleged conspiracy to launder stolen cryptocurrency, following a 2016 hack of crypto exchange Bitfinex. 94,000 stolen bitcoin were recovered, making it the largest government seizure of bitcoin at that time.
The IRS-CI also worked to target sanctions evaders over Russia’s invasion of Ukraine, including Russian oligarchs. By joining Taskforce Kleptocapture, IRS-CI was able to identify “nearly 50 individuals and entities for potential sanctions-related enforcement” through September 2022.
"We've been doing it for more than 100 years, and we've followed criminals into the dark web and now into the metaverse. Tax and other financial crimes know no borders. If you violate the law and end up in the crosshairs of an IRS-CI special agent, you are likely going to jail,” said Chief Lee.