As special agent in charge of the Internal Revenue Service — Criminal Investigation Washington D.C. Field Office which covers the Virginia, Maryland and Washington D.C. area, my responsibilities are to supervise investigations relating to criminal tax violations. I also oversee investigations into other related financial crimes that are committed within our communities. Too often, I have witnessed the emotional pain and financial devastation inflicted upon victims of tax and other financial crimes.

Some of these schemes can literally cost you your life savings. Others can result in your prosecution and imprisonment if you knowingly participate in them.

Following are a few of the more prominent tax scams and schemes you should be wary of:

Tax Scams — Fraudsters will try to convince you that there is no legal requirement to file a federal income tax return or to pay federal income taxes. This is entirely untrue. The federal courts have upheld the validity of the federal income tax laws for decades. Each year, about 1,000 individuals are prosecuted in this country for evading their income taxes, willfully failing to file tax returns, filing false tax returns in order to obtain inflated tax refunds and other such tax crimes.

Investment fraud — Getting involved in an investment fraud scam, such as a Ponzi scheme, can lead to financial ruin. If someone says that they can help you earn extraordinary rates of return on your investment, get a second opinion from a legal, tax, or investment professional. If it sounds too good to be true, it is too good to be true. All too frequently, such claims are based solely on trickery and deceit. These fraudsters may simply pay “interest” to you from other victims’ invested money and then provide you with phony quarterly financial statements which they prepared. What these fraudsters really want is to enjoy a lavish lifestyle with your money.

Money laundering schemes — Money laundering is the conversion of illegal or “dirty” money into funds or assets that appear to have come from legitimate sources. Dirty money must be “laundered” or disguised in order for the criminal to use it. The criminal may attempt to accomplish this laundering by running the money through a legitimate business or establishing a business as a front to disguise the illegal source. Sources of dirty money include illegal drug sales, investment fraud, embezzlement, mortgage fraud, healthcare fraud, and dozens of other illegal activities. Don’t let anyone talk you into laundering money for them. It’s a crime and the criminal penalties can be severe – up to 20 years in prison.

Mortgage fraud — In general, mortgage fraud involves false representations made to a lender in order for a loan to be made that the lender would not otherwise approve. Mortgage fraud can be committed by home buyers, appraisers, real estate agents, loan officers, account executives employed by the lenders or a collusion of these individuals. Real estate transactions require legal documents which are usually signed under penalties of perjury. Don’t jeopardize your good name, your credit or your freedom by being dishonest in a real estate transaction.

Given the sobering nature of the current economic climate, it is critical that each of us be relentlessly vigilant in protecting the integrity of our personal financial affairs. The consequences of foregoing such vigilance are not kind, for whether one is the perpetrator or the victim, the price you will pay is exacting … loss of your freedom or financial ruin.