Statement of Lawrence E. Maxwell, Inspector in Charge,
Fraud, Child Exploitation and Asset Forfeiture Division, U.S. Postal Inspection Service

Testimony Before the Subcommittee on Oversight
of the House Committee on Ways and Means

Hearing Series on Deceptive Mailing Concerning Tax Refunds

July 19, 2001

Thank you Chairman Houghton, Congressman Coyne and other Members of the Subcommittee for the opportunity to testify today.

The U.S. Postal Inspection Service is responsible for protecting postal employees, the mails and postal facilities from criminal attack, and for protecting consumers from being victimized by fraudulent schemes or other crimes involving the mails.

In the last Congress the "Deceptive Mail Prevention and Enforcement Act" was passed by Congress and signed into law by the President. This law provided new disclosures to be made on certain mailings, afforded the Inspection Service with additional investigative tools and extended penalties to be levied upon violators of the law. One section of the law applies specifically to the type of mailing made by the "Revenue Resource Center" out of Boca Raton Florida.

The mailing done by "Revenue Resource Center" offers to provide a service that the government provides for free for a $12.95 processing fee and rush service is also offered for an additional $2.00. For the fee, the Revenue Resource Center will calculate the amount of a refund the taxpayer is due. The paid service is provided for free by the IRS. Millions of taxpayers will receive notice of the amount of their refund checks and when they can expect them.

The law provides that any solicitation for the purchase or payment for any product or service that is provided by the federal government for free must contain a clear and conspicuous statement that this product or service may be obtained from the Federal Government for free.

On July 17, 2001 a Complaint was filed by the U.S. Postal Service against the mailing for violations of the Deceptive Mail Prevention and Enforcement Act. The Complaint will seek penalties, the new law allows for penalties based upon the number of mailings. The penalties can range up to $1,000,000.

The investigation is ongoing. I will keep the Subcommittee informed of any additional activity regarding the subject mailing. In the past we have seen operations such as this one spring up in a various locations in an effort to stay one step a head of law enforcement.

Thanks to the vigilant oversight of this Subcommittee, the specific legislation passed last Congress, and the swift action taken by the U.S. Postal Inspection Service consumers have been alerted and the scam will be halted.

Chairman Houghton, Members of the Subcommittee, I will be glad to answer any questions about the investigation that the Subcommittee might have. Thank you.