MILLIONS OF FEDERAL DOLLARS APPARENTLY SCAMMED BY LOCAL AMERICAN SAMOA

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TAXPAYERS

By Vaaimamao Poufa

PAGO PAGO, American Samoa (March 9, 2000 – Samoa News)---Someone (or someones) has reportedly been engaged in some sort of tax scam involving the U.S. Internal Revenue Service (IRS) and American Samoa.

This scam has cost the federal treasury an unknown amount, but it could be millions of dollars. The American Samoa Government did not lose any money as a result of the scam.

Treasurer and acting Tax Office manager Ale Tifimalae Ale told Samoa News that the scam involves more than 700 tax returns, and it reportedly has been going on for several years.

Ale said two IRS officials were in the territory last week following up on this matter. Enforcement measures are expected in the future.

The scam involved local residents filing their taxes properly in American Samoa, and then illegally filing a second set of federal tax forms in California that allowed them to receive an "earned income credit" refund from the IRS which is not available locally and which American Samoa residents are not entitled to.

"IRS investigators have uncovered more than 700 tax filings where the tax returns are addressed to go to a single address in California," Ale said.

All the returns are reportedly channeled through a local tax preparer, who has been identified and who is the subject of a federal criminal investigation. More IRS investigators are expected soon to conduct further investigations, Ale said.

Ongoing investigations are necessary to determine how the tax refunds sent to the California address have been distributed.

The IRS is reportedly going to want its money back, so they need to know who has it.

According to Ale, the total amount of money involved in the scam is unclear, but if you assume the average tax refund for a tax filer is $1,000 to $2,000, and if the scam has been going on for three years, then the total amount could be over $3 million.

A confidential source in the canneries told Samoa News that the refunds "from the mainland" are sometimes much larger than that.

The Treasurer wants the bad guys to stop, because they are projecting "a poor impression of the culture and traditions of the country, and not to mention a great deal of embarrassment."

The same warning and advice was aired on KVZK-TV Tuesday night.

Ale said similar situations have been experienced by the other U.S. Territories of Guam and Virgin Islands.

Items from the SAMOA NEWS, American Samoa's daily newspaper, may not be republished without permission. To contact the publisher, send e-mail to

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