A former White House scientist was scammed out of $655,000. Then came the IRS.

[mahatmakanejeeves]

A former White House scientist was scammed out of $655,000. Then came the IRS.

The government that Frances Sharples served for more than four decades considers the money to be income, compounding her pain

By Michael Laris
December 14, 2023 at 6:00 a.m. EST



Frances Sharples, a longtime National Academy of Sciences leader who served as a technology adviser in the Clinton White House, lost hundreds of thousands of dollars to scammers. It started with a warning that her identity had been stolen. (Amanda Andrade-Rhoades for The Washington Post)

Frances Sharples walked through the glass doors of her credit union, ready to make the worst decision of her life. ... She had a script from the man promising to save the retirement account she built over decades as a science adviser to the U.S. government, including in the White House. ... He told her to transfer more than $600,000 — and to keep her cellphone on so he could listen to her. If anyone asked whether she was put up to it, she was to reply: “No, absolutely not,” according to her hand-scrawled notes. No one did. She handed the clerk the routing number, walked back to her dented 2005 Honda and returned home. ... “Now I’m good,” she told herself. “Now, I’m safe.”

The doctorate daughter of a plumber from Queens had made a life advising the federal government on stem cells, new energy technologies and the effects of biological weapons. Despite a history of meticulousness, Sharples was victimized by a global network of online criminals, including a man with a gentle Indian accent who helped make off with much of her life savings.

[ How Congress leaned on crime victims to pay for Trump-era tax cuts ]

The government she served for more than four decades is compounding her pain. The Internal Revenue Service told Sharples, 73, she had to pay hefty taxes on the stolen money, which the federal government considers income. Tax specialists said someone in Sharples’s position could face a six-figure bill.

{snip}

‘It’s my idea’

With Sharples’s regular savings account wiped out, the criminals eyed a bigger prize: her retirement account. ... She had been setting aside money for decades, including in a tax-deferred account. Billings told her to cash it out and transfer the money to her credit union. ... At that point, a precaution set up to backstop bad customer decisions kicked in. After Sharples asked TIAA — which managed the retirement account — to transfer her money, a senior fraud investigator with the company called to question her decision. ... “Is someone else telling you to do this?” he asked. ... “No, it’s my idea,” she said, following the script. “I’ve decided I want to invest in a different way.”



The script Sharples followed. She scratched out “$25,000” and wrote in “$630,000” in preparation for her next transfer. (Frances Sharples)

TIAA did what Sharples asked. ... That had big tax consequences. As required, TIAA set aside withholdings to cover federal and state taxes. Then it transferred the remaining $630,000 to her credit union. ... With those hurdles cleared, the script and procedure at her credit union would be the same as the first time she transferred money.

{snip}

Story editing by Tim Richardson. Photo editing by Mark Miller. Copy editing by Mike Cirelli. Design by Jennifer C. Reed.

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https://wapo.st/475aAeC

By Michael Laris
Michael Laris writes about the transformation of the U.S. transportation system. He has covered government accountability and was a reporter in Beijing. Twitter https://twitter.com/mikelaris

[UpInArms]

1. several years ago,

a friend called me. She is a paraplegic and uses her computer for just about everything.

She said that her computer was frozen with that message (basically the same one from this article) across her screen and could I help her or should she call Microsoft?

I told her that her computer had been compromised and to just shut it off and I would pick it up later and get the hacker out of it - either by using some software or by reformatting the computer.

She again said "shouldn't I just call Microsoft?" and my response to her was:

Microsoft does not give a flying F*** about you or your computer. That is a scammer and they will attempt to steal everything you have.
Just turn it off and wait for me to get it fixed.

.....

I have never had Microsoft try to "fix" anything and would probably not trust anyone calling me saying they were a Microsoft representative.

Once you buy your computer, no one really cares if it runs well or not. This is a YOYO society. You are On Your Own.

[question everything]

9. I hope that you were able to help

[UpInArms]

10. It worked out in her favor

Her computer was secured, she learned that scams are a real threat and she never falls for that again

[marybourg]

2. The part that really needs more investigation is where she

called the number on the back of her bank card, rather than the number that popped up on her screen-as we are told to always do- and yet she still was connected to the scammers. That absolutely should not have happened.

Edited to add: I do kind of resent the article’s seeming to make the IRS one of the bad guys here. Congress - not the IRS - makes the laws that control the tax system. The IRS only writes regulations to carry out the laws. But I guess the media knows how to get clicks.

[Bayard]

3. I don't understand,

Why the IRS would say she had to pay taxes again on money she's already paid taxes on while she was working.

But, these scammers definitely take advantage of older people.

[mahatmakanejeeves]

4. This is a long story. I've clipped a lot to comply with the four-paragraph limit. NT

[MichMan]

7. It was a retirement account. There were no taxes taken out until it was withdrawn

[3Hotdogs]

5. Doesn't she get to deduct the loss of $600k to theft?

[mahatmakanejeeves]

6. Nope.

[ How Congress leaned on crime victims to pay for Trump-era tax cuts ]

[MichMan]

8. The tax money she owes on the withdrawal was already withheld

TIAA did what Sharples asked. ... That had big tax consequences. As required, TIAA set aside withholdings to cover federal and state taxes. Then it transferred the remaining $630,000 to her credit union