IRS Workers Stealing Your Cash! Look Who's Cashing in Your Check to the Government

April 15, 2009— -- Think your income tax check is safe when you send it off to the IRS? Think again. An ABC News investigation has uncovered case after case of checks being stolen, manipulated and cashed by contract employees responsible for processing them, resulting in delayed payments and heavily disrupted lives.

"It was beyond my wildest imagination that this theft would be an inside scam," Brad Miller of Garland, TX told ABC News.

Last year, Miller sent a cashier's check for more than $20,000 to the IRS, where it ended up in the hands of a Bank of America employee in Dallas who embezzled $485,539.76 in taxpayer remittance checks.

Miller said the theft left him out of a $400 fee he had to pay to stop payment on the check, not to mention the violation he felt knowing someone had accessed his money and personal information.

"I never before gave it a second thought that my check made out to the IRS would end up in the wrong hands," Miller said.

As it turned out, the Bank of America employee, Emmanuel Ekwuruke, had stolen nearly half a million dollars in taxpayers checks, many of which he manipulated from "IRS" to "MRS" by making the 'I' into an 'M.' He then added a "MR" and his wife's first and last name, before attempting to cash the checks. Just last week, Ekwuruke, a native of Nigeria in the U.S. as a permanent resident, was found guilty of theft, embezzlement, misapplication by a bank employee, as well as theft of public money and aggravated identity theft and sentenced to 66 months in prison.

Lockbox banks have been used by the IRS since 1985, and the system is composed of three commercial banks that collect tax payments at eight lockbox sites. According to the office of the Treasury Inspector General for Tax Administration's (TIGTA) most recent data, the lockbox network processed over 67 million payments in Fiscal Year 2007, which added up to over $400 billion. Bank employees, many of which are contract or part-time workers, staff the facilities.

According to a press release from the Department of Justice announcing the indictment of a contract worker for stealing, bank employees at the IRS lockboxes collect checks sent in by taxpayers from post office boxes, process them and then forward the transaction records to the IRS.

"This speedy collection/processing service allows the U.S. Treasury to receive the funds promptly, thereby earning substantial interest revenue for the United States," according to the DOJ.

The IRS did not immediately respond for a request for comment.