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Accountants With Guns: IRS Trains QC Students In Real World Cases
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| Hazel meets with an IRS auditor to request a search warrant.
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By Ellen Thompson
You’re in the middle of the Bronx with your partner, and somebody shoots him. He’s lying there on the floor in a pool of blood. What do you do?
“How do you answer a question like that,” asked Alan Fogel, a special agent with the FBI, “especially when you’re thinking you’re there for a job interview that would have you sitting behind a desk.”
But that was the first question the IRS chose to ask him. And they asked it at 7:30 a.m.
It was 1979 and Fogel, who had just received a degree in accounting from Brooklyn College, was looking through the New York Times classified section, when he came across a small ad for the IRS. Looking over the vague ad he thought, “why not?” He knew how to crunch numbers, so he called the number at the bottom of the ad and set up an interview.
“I sat there for a few seconds considering the question. My first thought was ‘let’s get him,’ even though I was still wondering what this had to do with accounting,” Vogel recalled. “But I knew the right answer was to get help. So that’s what I said.”
The next question the IRS threw at him that morning was: you walk into a room where you are supposed to interview a suspect and you see papers on a table, do you look? Vogel told the agents that he would obtrusively glance. But what if the papers were turned over they asked. Vogel said he wouldn’t do anything and the agents penned another check on his application.
“Then they asked, what if I were walking into the room with my boss and he takes the papers and walks out,” Vogel explained to the three accounting students sitting before him.
“So I said, well, I guess I’d have to report him. And I got another check.”
Vogel didn’t know it at that point, but his 9-to-5 would no longer consist of bank consolidations and tax filings, instead, he’d be on the mafia’s tail.
Drawing four pieces of paper from a white binder, Vogel turned to the Queens College and Pace University accounting students who were still enthralled by his account.
“So this here is your mission for the next eight hours…,” he said.
Romanticizing Accounting
The three Queens College accounting students who were sitting before Agent Vogel were about to experience a whole other realm of accounting. They, along with 26 other students, gathered at Pace University the morning of Oct.13, as 100 other accounting students in three cities across the nation, came together at various other universities. Within eight hours each student would be an IRS special agent for a day.
The program, which places accounting students alongside IRS special agents, was taking place in New York City for the first time thanks to a partnership between the IRS, Queens College and Pace University. It allows students a hands-on look at forensic accounting from an initial complaint to an arrest.
“Being that a large percentage of our Queens College graduates happen to stay in Queens after graduating, we saw the difference a program like this could make in the borough,” explained Queens College Assistant Dean of Social Sciences John Walker. “All of this partnering is an opportunity for not only the borough to benefit, but the students as well.”
“Plus, forensic accounting seems to be more and more of a demand these days,” he said. “And then we have students like Lance Hazel, a senior in the program, who have a real inquisitive side and would be perfect for this type of accounting.”
The “IRS Special Agent for a Day” program takes a mock case IRS Agents would typically spend a year to two years cracking and condenses it into eight hours, giving students the opportunity to uncover clues, conduct surveillance and ultimately crack the crime.
“My guess is one third of the students will fall in love with the investigation,” said Walker, who intends to bring the program to Queens in March 2007.
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| An armed IRS instructor demonstrates the proper handcuffing procedure.
Photo by Joseph Foy
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The Case Is On
There was a knock on the door. A man in a black leather coat with a faded Yankees cap shadowing his brow stepped into the room. His name was Louis Snitch and his piercing blue eyes said he had a story to tell.
“I worked at Cheaters Bar and Grill for three years and there’s something not right going on there,” Snitch said, peering at Agent Vogel and the three students, including Agent-For-A-Day Lance Hazel.
The owner of the bar, Chris Shots, had been cheating on his taxes keeping the proof in a second set of books. And Snitch wasn’t too happy that his boss had him serving drinks to underage customers.
Agent Hazel and his two partners began jotting down Snitch’s words.
Snitch answered some questions, and then explained that Shots is putting the business up for sale at $3.2 million. Realizing this was a pretty good allegation, Hazel retrieved Shots’s personal and corporate tax returns. He was looking for anything that would lead him towards the set of books.
The tax returns told Hazel that Shots was living on $12,000 a year, and had recently bought a $125,000 Hummer. The allegation was gaining strength.
Hazel and one of his partners called Shots and posed as potential buyers. The two removed their badges and met Shots at the McDonalds on Fulton Street. They told him that they were business associates looking to purchase bars near college campuses to gain a steady profit.
But as soon as Hazel’s questions began to touch on the topic of reaping greater profits, Shots called them out.
“Hold on, what are you guys cops are something,” Shots fired back at the agent. “Why would you ask me this?”
Shots stood from his seat and began patting Hazel down. Once he was sure the agents weren’t wearing a wire he explained how he was able to skim, and the fact that he kept the second set of books hidden in the bar.
With a credible paper trail in hand and Shots’ confession, Hazel contacted the IRS attorney and a magistrate judge to sign off on a search warrant of the bar.
“You know you are trying to prove one of the hardest charges out there, right,” the attorney said to Hazel.
“I know,” Hazel replied, but this was something he had been interested in since he began taking accounting classes during his sophomore year at Queens College.
Busted!
With the search warrant in hand, Hazel and his partners stormed into the bar, pushing liquor bottle after liquor bottle to the side searching for the books. Then in walked Shots.
“What the hell is going on here?!” Shots yelled. “What do you guys think you’re doing?”
“We’re agents with the IRS and we have a search warrant. That’s what we’re doing. Now where are the books?” Hazel responded, as his partner handed Shots the search warrant.
Within minutes the agents recovered the books. Though Shots didn’t go to jail that afternoon; the agents planned to follow up on the case and make an arrest once they could prove a link between Shots and the books.
“It’s not often that accounting students, or even the American public gets to see this side of the IRS,” explained IRS Public Information Officer Joseph Foy. “Not many people know there are agents who carry guns, conduct arrests and are protecting America’s piggy bank.”
When the numbers are looked at financial fraud winds up to be a $1 billion industry, “something that is rarely represented in the accounting text books,” said Foy. |
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