Feds say Calif. hacker stole identities of dead, used them to file for millions in tax refunds

Feds: Calif. man stole IDs, filed fake tax returns

PHOENIX — Federal officials in Phoenix on Thursday announced an indictment that accuses a California man of stealing the identities of hundreds of dead and living people and using the information to electronically file for millions of dollars in fraudulent tax returns.

Daniel David Rigmaiden, 29, of Santa Clara, Calif., ran the sophisticated tax fraud scheme, said Dennis Burke, the U.S. attorney for Arizona. Rigmaiden has been in custody since his arrest in July 2008 but his case has been under seal until recently.

He is charged with conspiracy, 35 counts of wire fraud, 35 counts of aggravated identity theft, two counts of mail fraud and an unauthorized computer access charge. Prosecutors are also working to seize assets he received during the scheme, which they believe began in 2005.

Rigmaiden is being held at a federal prison in Florence, Ariz., and has pleaded not guilty. He has fired at least three attorneys since his arrest and now represents himself in the case. Rigmaiden’s most recent attorney, who is now assisting him with the case, said he couldn’t comment.

A Phoenix man, Ransom Marion Carter III, 43, has also been indicted but remains a fugitive. Another co-conspirator in Utah has been arrested, but that case remains sealed.

The case has been kept sealed while federal agents were trying to get Rigmaiden to cooperate, Burke said. In January, Rigmaiden told a federal judge he was not interested in cooperating and wanted his case unsealed. The judge obliged on March 26.

According to a search warrant affidavit, the indictment and information provided at a press briefing, Internal Revenue Service agents learned in May 2007 that fraudulent tax refunds were being deposited in a bank account belonging to Carter. While investigating him, the agents discovered hundreds of fake tax returns were being filed electronically — many using similar names — usually claiming less than a few thousand dollars.

After gaining an informant’s help, agents identified a person who called himself “Hacker” who was apparently telling Carter what to do, and they traced him to the San Jose area. Eventually, they discovered that Rigmaiden was “Hacker” and arrested him after sending him cash shipments that were the proceeds of a number fake tax returns.

“None of his co-conspirators had ever met him, said Dawn Mertz, the IRS special agent in charge in Phoenix. “Their only correspondence with him was over secure e-mail. They didn’t know where he lived, who he was, nothing.”

Burke said it was a sophisticated operation.

“It took investigators a long time to figure out who exactly he was and where he was and how he was operating this thing because of the steps he took to keep information hidden and how he operated this scheme,” Burke said.

He said the conspirators received more than $1 million from 570 fraudulent tax returns and filed an additional 1,336 returns seeking more than $3 million.

“This is an individual who is very bright, very sophisticated and has put a lot of thought into this fraud,” Burke said of Rigmaiden. “There were efforts to get the individual to cooperate. That was a lengthy and ongoing process. It is evident now … that the individual chose not to cooperate and we’re proceeding to trial.”