Los Angeles real estate billionaire Donald Bren’s name may not be familiar to many people reading this blog. Which means you probably wouldn’t recognize his face if he walked up and introduced himself.

Which is probably also why a complete stranger was able to walk into a bank, open an account in the billionaire’s name, and walk away with the real estate mogul’s $1.4 million tax refund from the IRS.

And when you get over the idea of a $1.4 million refund from the IRS, pay attention to the notion that if someone as financially sophisticated as a real estate tycoon (worth an estimated $12 billion and ranked by Forbes Magazine as the 16^th richest American) can be so easily duped, what chance do the rest of us have?

What makes the story even more compelling is how the thief was able to get so many pieces of the puzzle in order to pull off the scam. To start with, he needed to get his hands on the billionaire’s $1.4 million tax refund check, which he apparently managed to achieve by simply stealing the victim’s mail.

Then on to the bank to open an account in which he could lodge the stolen check, and here’s where it gets interesting. I can understand the bank employee not instantly recognizing the name of a local billionaire, but I assume the employee should have been just a little suspicious when a complete stranger wanted to open a brand new bank account using a freshly minted $1.4 million check from the IRS. What was wrong with his existing bank account, for example?

When he just as quickly started transferring that money to other accounts outside the bank, that should have been yet another red flag for bank employees. But apparently not, and the thief was able to get away with more than $1 million before the scam was finally detected.

If this happens to you, no matter how modest your refund is, don’t except to see your refund replaced in a hurry. The IRS does not promise or guarantee a refund replacement. If your refund is diverted into the account of a thief, expect to wait a year or more while the IRS slowly – very slowly – investigates.

Lessons learned?

• Authorize the IRS to make a direct deposit of your return. While it’s not fool-proof, it eliminates the threat of mail theft, and you can get your money back faster.
• Don’t expect your bank to be as vigilant as they ought to be. Bank employees are busy, and often don’t want to appear rude by asking new customers too many questions. So guard your own account well by asking your bank to share their   identity verification policies and procedures. If they do not have sufficient policies and procedures, find out what other banks offer.

RELATED STORY: Billionaire Donald Bren targeted in $1.4-million ID theft

http://www.latimes.com/business/la-fi-bren-fraud-20100805,0,295335.story

Related posts:

1. The Taxman (and Identity Theives) Cometh: The “Tax Tip Thursday” Edition
2. In the Headlines: Facebook “PLEASE SEND ME MONEY” Scams on the Rise
3. IN THE HEADLINES: Why You Can’t Always Depend on Zero Liability
4. IN THE HEADLINES: Home Seller Scams on the Rise