The Internal Revenue Service's Criminal Investigation unit opened more than 2,550 criminal investigations, identified over $31 billion from tax and financial crimes, and saw a 90.6% conviction rate on cases accepted for prosecution during fiscal year 2022, even as its agents came under political attack, according to a report released Thursday.
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"The other thing that is incredibly challenging is the wildly inappropriate misinformation that's been out there in the recent past," said IRS-CI chief Jim Lee during a conference call Thursday with reporters. "Not only is it wildly inappropriate, but it's dangerous. I couldn't be more proud of the agents, special agents, investigative staff, administrative staff, our communication specialists, and all of the personnel that make CI tick, that carry out this mission."
IRS criminal investigators have been investigating various forms of tax fraud and other financial crimes, including money laundering, cybercrime, human trafficking, cryptocurrency scams, COVD-19 relief fraud, and more.
During the fiscal year beginning Oct. 1, 2021, and ending Sept. 30, 2022, IRS-CI identified $32 billion in fraud, three times what it identified in fiscal year 2021, according to Lee, and its 90.6% conviction rate was among the highest in federal law enforcement.
"If you get in the crosshairs of an IRS-CI special agent, it's highly likely you're going to jail," he added.
The conviction rate in fiscal 2022 was similar to other fiscal years. Of the over 2,500 criminal cases initiated, 71.7% of investigations were tax or tax-related crimes. The remaining crimes included financial crimes tied to narcotics, human smuggling, child pornography, bank secrecy and money laundering. Lee noted that in April, IRS-CI led the takedown of Hydra, one of the largest darknet marketplaces of narcotics and other illicit goods in the history of the U.S. government, and in February it seized $3.6 billion in cryptocurrency from the Bitfinex hack of 2016. "That was the largest single financial seizure in the history of government," said Lee.
IRS-CI also handled 840 cases of COVID fraud in recent years and is just shy of 400 indictments, part of a 98.9% conviction rate in that area, with an average sentence of three years for the 180 cases sentenced to date.
The division has been coordinating with other tax enforcement authorities abroad through an international initiative. IRS-CI joined Task Force Kleptocapture in March 2022 to target Russian oligarchs and other sanctions-evaders. It also worked with four other chiefs of global tax enforcement under the J5 initiative to identify potential sanction evaders or sanctioned assets as part of a global strategy to deter Russia's aggression. As of September, the agency had identified nearly 50 individuals and entities for potential sanctions-related enforcement.
"In FY 2022, IRS-CI expanded their partnerships with foreign counterparts to help combat tax fraud and financial crimes on a global level," said Guy Ficco, deputy chief of IRS-CI. "With the Russian sanctions investigation, after the Russian invasion of Ukraine, the Department of Justice created the Kleptocapture Taskforce to focus on sanctions and violations of sanctions investigations. CI was put on this task force and quickly took a leadership role, which made perfect sense. CI is in the business of tracking financial proceeds globally. This is our specialty."
IRS-CI's 2,077 special agents spent about 70% of their time investigating tax-related crimes like tax evasion and tax fraud during FY 22, while nearly 30% of their time was spent on money laundering and drug trafficking cases. Special agents identified over $31 billion from tax and financial crimes, and the agency seized assets valued at approximately $7 billion in FY 22. Ficco noted that IRS-CI is the only U.S. federal law enforcement agency that focuses 100% on financial investigations.
"The cases the IRS-CI team investigated over the past fiscal year touch multiple continents and require cooperation with partners around the globe," said outgoing IRS Commissioner Chuck Rettig in a statement Thursday. "This is why IRS-CI continues to cement itself as the preeminent law enforcement agency investigating financial crimes on a global scale."
