Police say it started as a suspicious person at a Vermillion ATM. Authorities say it lead them to a high-tech organized crime room run out of a University of South Dakota dorm room that crosses state lines.
The result is tax fraud that's so sophisticated, law enforcement isn't sure how far it reaches. Vermillion Police say at least two undergraduate students from USD participated in a scheme to file false tax returns with stolen identities to get a large return on IRS issued debit cards.
"They can report that you made $200,000 and are due back $7,000 back and then spend the money before anyone knows it's all a lie," Vermillion Police Chief Matt Betzen said.
While living on campus, the men allegedly collected names and social security numbers in the Vermillion area.
After a search of the dorm room in April, Betzen says detectives uncovered at least one instance where the men collected more than $7,000 from the IRS after filing a fake return. But Betzen warns there likely are more victims.
Right now, police say they don't know how many victims there could be in South Dakota. They're urging everyone to pay special attention to their mailbox.
"If you start getting correspondence from the IRS that doesn't make any sense, you need to get right away with the IRS and find out whether or not you've been a victim of identity theft," Betzen said.
USD administration declined a request for an on-camera interview. But in a statement, President James Abbot said "It disappoints me to think any of our students could be involved. We will assist the investigation in any way we can. If necessary, our students will be held accountable by not only the judicial system but the University as well."
The US Treasury is now handling the case. Betzen says it could take months before arrests are made.
If you believe someone has filed a fraudulent tax return using your information, contact the IRS Identity Protection Specialized Unit (IPSU) at 1-800-908-4490.