‘Revenue department’ fraudsters scamming Pa. Businesses

Businesses in Pennsylvania are being warned that scam artists may be preying on them. 

According to the Pa. Department of Revenue, the scammers are impersonating the department by sending Pennsylvania business owners fraudulent letters in the mail, which direct them to turn over their accounting records.  

The goal of this ploy, according to the department, is to trick unsuspecting taxpayers into providing sensitive financial information, which the criminals behind the scheme can use for a number of illicit activities that could seriously harm a business’ financial standing.   

“This is a prime example of fraudsters impersonating a government agency as they try to convince hardworking Pennsylvanians to turn over sensitive information about their businesses,” Revenue Secretary Dan Hassell said. “We are urging Pennsylvania business owners to be on high alert if they receive a suspicious notice that includes the Department of Revenue name and logo. If you have any doubt at all about the legitimacy of a notice from the department, please use the contact information listed on our website, revenue.pa.gov. This is the best way to ensure you are speaking with a legitimate staff member at the Department of Revenue.” 

He said the goal of this scam is to make the recipient of the letter believe they are being investigated by the Department of Revenue for an “alleged violation of delinquent sales tax liability.”  

The letter also threatens taxpayers by saying penalties will be imposed on their accounts. Further, the letter includes contact information for a “Resolution Officer” and urges the business owner to provide accounting records prepared by a licensed professional, such as an attorney or CPA. 

Providing this information allows the scammers to comb through the accounting records for sensitive information such as bank account numbers and other financial data, which could be used to make unauthorized transactions, request fraudulent tax refunds, and even apply for loans under the name of the business. 

Although these counterfeit notices bear the department’s name and logo, the notices include suspicious and inaccurate details that can help differentiate between a counterfeit notice sent by a scam artist and a legitimate notice sent by the Department of Revenue, he said.  

There are signs that business professionals can look out for according to the department: 

  • The counterfeit notice does not include a return address. A notice from the Department of Revenue will always include an official Department of Revenue address as the return address.
  • The counterfeit notice addresses the recipient as “Dear Business Owner.” When the Department of Revenue attempts to contact a business through a notice in the mail, the notice typically addresses the business owner or business name.
  • The counterfeit notice is sent by the “Pennsylvania Department of Revenue Tax Investigation & Enforcement Unit” and claims the business is “under investigation by the Pennsylvania State Revenue and Cash Disbursement Unit.” While the department does conduct criminal tax investigations and tax enforcement, the units listed on the counterfeit notice are phony. Reach out to the department directly, as advised below, to determine if the “Unit” named exists.
  • The counterfeit notice claims that the business has not registered their “entity with the Pennsylvania Department of State and The Sales and Use Tax Division.” If you are an established business in Pennsylvania, it is likely that you already registered your business with the Pennsylvania Department of State and have registered for a sales tax license by completing the Department of Revenue’s PA Online Business Entity Registration (PA-100).

The Department of Revenue is encouraging Pennsylvania businesses to keep the following tips in mind to safeguard against this scam: 

  • Ensure You Are Speaking With Legitimate Representatives of the Department: This scam uses the Department of Revenue’s name and logo to pose as a government entity. If you have any doubt at all about the legitimacy of a notice from the department, you should reach out to a department representative by using the Online Customer Service Center. This allows the taxpayer to securely submit a question through a process that is very similar to sending an email. 
  • Examine the Notice: This counterfeit notice used vague language to cast a wide net to lure in as many victims as possible. Examine the notice for identifying information that can be verified. Look for blatant factual errors and other inconsistencies. If the notice is unexpected and demands immediate action, take a moment, and verify its legitimacy. 
  • Conduct Research Online: Use the information in a potentially counterfeit notice, such as a name, address or telephone number, to conduct a search online. The Department of Revenue’s website, revenue.pa.gov, is the best source to verify information contained in a legitimate notice from the department.  

Anyone concerned about a fraudulent notification can visit the department’s Verifying contact by the Department of Revenue webpage for verified phone numbers and contact information. This will help individuals know they are speaking with a legitimate representative of the department. 


Harrisburg restaurateur faces fines, jail for pandemic-related fraud charges

A Dauphin County restaurant owner faces $2.6 million in fines and up to 90 years in prison after allegedly defrauding the federal government out of $237,500 in loans from the Small Business Administration.

Scott Levy, owner of the Hershey Road Family Restaurant in Harrisburg, applied for $227,500 in loans through the SBA Economic Injury Disaster Loan (EIDL) program and Paycheck Protection Program (PPP) before spending a majority of the money on personal expenses and transferring $125,000 to his mother in Florida, according to federal prosecutors.

Levy, 58, was charged with bank fraud, wire fraud and money laundering, the U.S. Attorney’s Office announced on Tuesday.

According to allegations filed by the U.S. Attorney’s Office for the Middle District of Pennsylvania, Levy was approved for $159,900 in EIDL proceeds in June 2020 and a $77,600 PPP loan in May 2020 on behalf of his Harrisburg restaurant.

The court alleges that Levy did not use the funds for their intended purpose when he gave half the funds to his mother to place in safe deposit boxes and spent the rest on personal expenditures.

His business, Hershey Road Family Restaurant, closed last July.

The case is to be consolidated with another tax fraud case that Levy plead guilty to last November.

Levy admitted late last year to tax fraud and related offenses after he failed to pay more than $230,000 in federal income and payroll taxes from Jan. 1, 2014 to Dec. 31, 2018.

Levy’s attorney, Joshua Lock of Harrisburg-based Law Offices of Joshua D. Lock, said that the firm will not be commenting on the case at this time.

State hires identity-verifying firm for PUA program after fraud problems

The check should soon be in the mail for people claiming Pandemic Unemployment Assistance funds.

The Pennsylvania Department of Labor & Industry announced delays in sending checks last week after it discovered numerous cases of fraudulent claims including the arrests of 18 prison inmates and their accomplices for allegedly making $300,000 in claims on stolen identities.

L&I Secretary Jerry Oleksiak, said the department has now contracted with security vendor ID.me to provide additional identity verification that is needed to root out such fraudulent claims.

ID.me is a federally certified identity verification provider that specializes in digital identity protection.

“This new layer of identity verification will help ensure PUA payments are going to Pennsylvanians in need and not into the pockets of fraudsters,” said Secretary Oleksiak. “Our partnership with ID.me will allow us to make payments more quickly to legitimate PUA claimants while helping L&I fulfill its fiduciary responsibility to the public to prevent fraud.”

Those who have filed new claims since last week should be contacted by ID.me in the near future in order to have their identification verified so that checks can be processed.

PUA provides financial assistance for self-employed, independent contractors, gig workers, and others not eligible for regular unemployment compensation.

ID.me is only being implemented for the PUA program at this time. Identity verification for other unemployment programs have not changed.

Those already receiving PUA funds were not impacted by the delays.

A spokeswoman for the department could not give a specific timetable for when the PUA checks will start going out, but said that now that ID.me will be conducting the identity verifications, it should be very soon.

State charges 20 more with conducting a PUA fraud scheme

The state’s top law enforcement agent charged 18 prison inmates and two accomplices with fraudulently obtaining $300,000 in unemployment benefits reserved for employees who lost their job as a result of the COVID-19 pandemic.

Attorney General Josh Shapiro said the arrests are linked to at least two existing organized groups of inmates and outside accomplices who conspired to provide false information on Pandemic Unemployment Assistance (PUA) applications.

One ring operated out of the State Correctional Institution Benner of Centre County and allegedly obtained $153,470 in fraudulent unemployment benefits, according to Shapiro. A second, smaller ring was operated out of the State Correctional Institution Mahanoy of Schuylkill County, consisting of two ringleaders and two additional inmates, who collectively obtained $109,900 in fraudulent unemployment benefits.

According to a review of recorded phone conversations and unemployment claims filed with the state Department of Labor and Industry, Adele Moore, resident of State College, and James G. Neff Zonge, an inmate at SCI Benner, began operating the fraud ring out of SCI Benner after Moore successfully applied for COVID-19 unemployment benefits on behalf of Neff Zonge. Together they allegedly established a system in which Moore would use an inmate’s personal identifying information, apply for COVID-19 benefits from her address and then give the inmate a portion of the collected benefits. Shapiro said Moore would often keep the majority of the money for her own personal use.

The Mahanoy ring was found to have been lead by York resident Wendy Danfora and inmate Markal Munford of Frackville. Danfora, who took the personal information of her inmate co-conspirators to apply for unemployment benefits, gave a portion of the benefits to other inmates but kept the majority of herself, Shapiro said.

In addition to members of the Benner and Mahanoy rings, state officials arrested six inmates without any known links to a ring, Shapiro said. The arrests are part of an ongoing investigation by the Office of the Attorney General in coordination with the U.S. Attorney’s Office in the eastern district of Pennsylvania.

Shapiro said ringleaders of the fraud schemes could potentially face more than 60 years in prison, while their co-conspirators could face more than 40.

The latest allegations announced on Wednesday make 53 defendants in total that have been charged with conspiracy to steal taxpayer funds from behind bars. Shapiro said there are likely to be more arrests of individuals associated with prison rings fraudulently obtaining unemployment benefits.

“Our work here is not done,” Shapiro said at a press conference Wednesday morning. “Let me be clear about something: there will be more criminal charges coming in this matter.”

The case will be prosecuted by Senior Deputy Attorney General Heather Castellino, Shapiro said.

Suspected fraud delays Pa.’s Pandemic Unemployment Assistance

The Pennsylvania Department of Labor and Industry said there is going to be a delay in payments for new applicants to the Pandemic Unemployment Assistance program after it detected potential fraud.

The delay, which does not affect those already receiving PUA payments, will allow the department to develop stronger identity verification methods.

“We know the PUA program is a lifeline for many families, and we want these Pennsylvanians to be able to access support as quickly as possible during this time of hardship,” said L&I Secretary Jerry Oleksiak. “However, we have a fiduciary responsibility to ensure taxpayer money is being spent appropriately. We are working to get additional anti-fraud measures put in place as quickly as possible so we can return our focus to serving Pennsylvanians in need instead of fighting scammers and thieves.”

Within the first few weeks of the PUA program, he said scammers began filing claims under stolen identities using stolen personal information.

Several states, including Pennsylvania, implemented security measures to help identify and prevent payout for fraudulent claims. As these measures were put in place, L&I saw a reduction in the overall number of claims filed for the PUA program.

The department said last week its staff noticed a dramatic spike in new claims. The office received more than 20,000 claims on Friday, with them filed from outside of the state. The normal average of applications per day is around 5,000.

Applications for the PUA program are continuing to be accepted, but new payouts are being postponed until the new identity verification methods are implemented.

Fighting the cons: As more scammers target the elderly, banks are taking steps to help clients protect their assets and themselves from thieves

Bank officials and financial advisers are making it their mission to educate and protect elderly patrons from becoming victims of predators out to scam them and take their money.

The elder population is most vulnerable to financial scammers, and banks and financial institutions are holding elder financial abuse seminars, providing facts regarding the latest scams, and giving tips to seniors in-person and online that will teach them how they can prevent cons from stealing from them.

Financial reps are offering best-banking-practice techniques and meeting one-on-one with elderly patrons, their grown children and trusted fiduciaries to make people smarter about financial scams.

Last month New Tripoli Bank held an elder abuse seminar focused on protecting the aging population from scammers. The next seminar will be held Nov. 21st at the bank’s Emmaus office.

“Scams are getting way out of control, and we needed to show people what we do on the inside and outside to prevent scammers from getting your money,” said Ann Bavaria, senior vice president of regulatory compliance, human resources and marketing at New Tripoli Bank.

Bavaria and her associate Stephanie Barton, the bank’s chief information officer, say that many elderly patrons are embarrassed and do not want to admit when they had money stolen, but they need the confidence to speak up.

Since many elderly patrons seldom go online, they are most often scammed by phone or email, Bavaria and Barton said. They fall prey to urgent calls made from strangers and fake IRS and FBI calls.

“Do not wire money to someone you do not know,” Bavaria said. “Come into the bank before you make that decision. No one calls from the IRS, and never give out your social security numbers or financial information.”


Protect yourself

Bavaria and Barton suggest the elderly always add a grown child or trusted member of the family to their account, and it is a good practice for senior members of the bank to have alerts put on their account.

“You can get a phone alert whenever a transaction is made or set it up to alert you for transactions involving certain dollar amounts,” Barton said, adding that a grown child on the account can also receive these alerts.

Many brokerage and investment firms are asking that a trusted friend or family member be added to their clients’ accounts, said Sandra LeMere, a a BSA Officer at American Bank in South Whitehall Township.

“…If there is any unusual request from the client, a phone call can be made to the trusted contact and a power of attorney can also be notified,” she said.

LeMere said to never answer calls from strangers, never answer “yes” when the caller asks if they are speaking with “your name,” never believe that the IRS or FBI is calling you, and never believe you have to pay cash up front to the hospital, ambulance or police department.

“The bank has procedures in place that alert them to transactions that may be out of the normal spending pattern for the customer,” LeMere said. “The bank may contact the customer, the power of attorney or other individual on the account to confirm the activity is legitimate. “

She also said that the bank will contact Aging and Adult Services and the police department when necessary, especially when an elderly customer is acting odd or nervous or unusual while in the presence of their caregiver.

At Bethlehem-based First Commonwealth Federal Credit Union, one of its most valuable pieces of advice is for the elderly to always be suspicious and use extreme caution anytime someone contacts them to forward money, said Caitlin Stibitz, vice president of marketing.

Those callers usually express a sense of urgency, she said. A common scam is one where a family member, often a grandchild, is calling and hard to understand. They say they are in trouble and need money secretly sent to them.

“Scam artists are good at getting personal information about victims or family members through Facebook or other social media. They use the information to make their story believable,” Stibitz said.

Having another person monitor the account helps prevent these scams, she said.


Don’t talk to strangers

At The Neffs National Bank in Lehigh County, Colleen Worysz, vice president of customer service relations, tells elderly clientele not to give out account information, user identifications or passwords. One should verify information every time, no matter who you are dealing with or how you are processing transactions.

Every email, letter and phone call should be scrutinized, say Deborah Carey and Sandee Kennedy at Merchants Bank of Bangor. An elderly member of the bank should name a fiduciary to watch their account to avoid using caregivers to act as agents.

The bank officials say that the elderly patron should trust the person they name as fiduciary but also verify what that fiduciary is doing on your behalf. Inform other family members so they, too, can monitor the senior bank member.

Check your bank account as much as possible and use traceable methods for transactions, Carey and Kennedy said. Online payments from your bank account can be traced, but it is hard to trace a handwritten check that was mailed or given directly to another person.

If you get a request to wire money, make that wire transaction at your bank and not through another company like Western Union. Wired funds are hard to recover unless the transaction is caught early.

The elderly should build a good relationship with their financial adviser, especially since there are times when a grown child or family member cannot be trusted, said financial planner Paul Marrella of Marrella Financial Group LLC, and part of Raymond James Financial Services Inc., in Wyomissing. Many of his clients are seniors, single, never married and have no children.

“Raymond James manages their money, pays their bills, and meets with them in homes or assisted living centers,” he said. “If there is suspicion of fraud, we will put a freeze on the account until we know the money is going to the right place.”

According to Marrella, it is much harder for a scammer to pull money out of an IRA or other retirement account, but still he said he advises his elderly clients to keep it simple.

“Consolidate assets,” he said. “Do not have 10 accounts out there that your grown children will have to worry about.” he said.

And tell your kids what’s going on, he added.

“Let them know what assets you have and where. Have a family meeting.”



When someone has an elderly parent, it is not easy to keep track of what they do. Grown children have their own lives, jobs, spouses, children and activities to juggle.

The daily activities of their aging parent can be somewhat overwhelming for the adult child attempting to maintain balance in their own life. But it is important to pay attention to elderly family members. They may be struggling with handling finances and it may be time to step in.
Here’s are signs from the Pennsylvania Department Banking and Securities that it may be time to step in:

Decision Making

  • Trouble paying bills.
  • Cannot make financial decisions alone.
  • Does not understand financial decisions that are made.
  • Others pressuring for money or changes to a will.
  • Others accessing accounts/missing money — Cannot reach financial adviser.

Suspicious Behavior

  • Others showing too much interest or control.
  • Signs of fear, anxiety, or submission.
  • Does not understand own financial status.
  • Discusses suspicious financial windfall.
  • Decline in appearance/appearance of neglect.

Source: Pennsylvania Association of Community Bankers.

Experts warn of dangers from alternative payment systems

On a regular basis, the e-commerce director at a Pennsylvania manufacturer used PayPal, as well as other digital and person-to person payment systems to buy equipment and services on behalf of the company.

The convenience of clicking a few buttons – instead of cutting physical checks or going through the hassle of a wire transfer – offered speed and convenience.

There was only one problem: many of the transactions were bogus, and over a two-year period the director funneled about $170,000 into his own bank accounts, according to Jeremy L. Witmer, a senior consultant in the business consulting services group at the professional services firm RKL LLP, which has offices across Central Pennsylvania.

There was “almost no oversight of the e-comm director,” according to Witmer. “His acts weren’t discovered until the company did a budget-to-actual review and found that more than $60,000 was paid to a web developer but never budgeted. The CFO asked for documentation, and realized the paperwork was faked. At that point we were called in.”

The firm worked with the State Police on the case, and the (soon-former) e-commerce director pleaded guilty, served time and had to make restitution.

“One of the reasons he was able to get away with this for so long was that the company didn’t have a procedure to verify and approve new vendors,” added Witmer.

The problem of fraud is a big one, according to a February posting from the information technology company IBM. “Online payment fraud losses from e-commerce, airline ticketing, and money transfer and banking services are expected to reach $48 billion by 2023, more than double the $22 billion in losses estimated for 2018,” noted the report, citing data from Juniper Research. “With the global rise in instant payment schemes, specifically new P2P payments methods, Juniper Research forecasts fraud losses for money transfers increasing by over 20 percent per annum to $10 billion in 2023.”

“We want to live in frictionless, one-click world, but that can bring its own problems,” said Jonathan T. Marks, a partner at the advisory, tax and assurance firm Baker Tilly and member of the forensic team. “When your bank account is linked to an outside payment provider, you need to be aware of what’s going on, and constantly monitor your transactions. Many people don’t bother to set up account alerts [which signal them about a variety of issues, including a transfer of funds above a certain dollar amount]. Even when merchants and individuals utilize two-factor authentication and other safeguards, that only helps to guard against — but won’t necessarily completely prevent — fraud.”

Financial institutions are also doing their part, he added. “If I use my credit card to buy gas in my hometown, and 60 seconds later my ‘card’ is charged for thousands of dollars of purchases in, say, Chicago, my bank may freeze the account. So that’s part of the solution, but there’s no single one-size-fits-all answer. You have to tailor a solution to fit each business and every transaction, because fraudsters are persistent and creative.”

No safety net

Nothing is 100 percent safe, according to Scott Groner, business technologist at the CPA and business consulting firm Concannon Miller in Hanover Township, Northampton County, but businesses and consumers alike can take some precautions, even if they involve tradeoffs.

“Merchants should try to know their customers,” he said. “When possible, request some form of valid identification, even though this may defeat the ease of digital transactions.”

He also has some advice for consumers when it comes to digital wallets, which can let them make in-store purchases by swiping their smartphones or other devices, instead of having to dig out a physical credit card.

“The beauty of using a digital wallet is that it’s not vulnerable to ‘skimmers’ [fraud devices attached to ATMs and other inputs that can swipe credit and debit card information], the way a physical card may be,” he said.

“But beware of using your mobile device on public wi-fi connections, since hackers may then be able to access your digital data,” he added. “Also, set your smartphone to lock after a certain period of time, so if you lose it, a hacker will have a tougher time getting into it. Finally, merchants and consumers alike should check their credit card and other account statements on a frequent basis to try to spot suspicious activity.”

Like freedom, the price of online financial security is eternal vigilance.