Elaborate Scam Set Up Phony Businesses, Employees To Fleece Taxpayers
DENVER (CBS4) – Investigators from the Colorado Bureau of Investigation, Department of Labor and Employment, Colorado Department of Revenue and the Internal Revenue Service believe they have uncovered a complex scheme that successfully scammed the government out of tens of thousands of dollars in 2013 before law enforcement authorities got wise to the scam.
“As fraud schemes become more sophisticated, some of those things do take a while to detect,” said Cher Haavind, a spokesperson for Colorado’s Department of Labor and Employment, which investigators say was targeted in the scheme.
Haavind declined to discuss details of the investigation saying it was still under investigation.
According to the state investigation, in 2013, several people founded businesses and then created employees for the businesses who filed for unemployment benefits. One of the businesses was a restaurant called “Mi Popito.” But when CBS4 went to the address for Mi Popito, it was actually a townhouse in north Denver.
Two other businesses created last year — Joy House Daycare and Charizma Beauty Salon — listed an address in the Curtis Park neighborhood of Denver. But a visit to the address showed it was a townhome and the woman who answered the door said there was no beauty salon at the home.
Investigators say Zanthia Woodard and another man set up the bogus businesses, and then used stolen Social Security numbers to create employees for the businesses. Investigators say the suspects then filed for unemployment benefits on behalf of the made up employees.
By the time the scheme was discovered last November, authorities say the state had paid out $50,730 in fraudulent unemployment insurance claims.
“All this crap going on is going to bring me down,” Woodard told CBS4.
She declined to meet in person and discuss the state investigation but disputed investigators claims that she was behind the scheme.
“That stuff was not done by me,” said Woodard. “I don’t have any charges. That is all false information. I didn’t set up any businesses.”
Woodard has not been arrested or charged in the case but is a target of the investigation, according to search affidavits filed in Denver. She has previously been arrested and convicted on forgery and theft charges.
The Colorado Department of Corrections said Woodard entered the state prison system in 2000 on forgery, theft and assault charges and completed her sentence in 2009.
Investigative records show that Colorado’s Department of Revenue identified 116 fraudulent tax returns they identified as “being tied to the suspects.”
“Zanthia Woodard prepared a number of the identified fraudulent tax returns,” an affidavit in the case state.
Susan Medina, a spokesperson for the Colorado Bureau of Investigation, told CBS4 she could not comment on an active, ongoing criminal probe.
At the home of Zanthia Woodard’s mother in the Curtis Park neighborhood, her mother said police investigators had recently visited saying they were looking into “some kind of fraud or something.”
A woman who identified herself as Woodard’s sister told CBS4, “I was just told not to talk to anyone and told by her also.”