Scams aren’t run by a kid in a basement: the business of fraud, with tax attorney

What does a scam actually look like once you strip away the Hollywood version? Not a bored teenager in a basement, but a well-funded, patient operation willing to play a long game for a payoff.

In the third episode of the Veriff Voices Deepfakes Series, host Anisah Osman Britton talks to Kelly Phillips Erb, the US tax attorney, former writer at Forbes and Bloomberg, and the voice behind the long-running Tax Girl blog. Erb spends her days on both sides of business of fraud: representing clients who’ve been scammed, and writing about the schemes that catch them. The conversation ranges from IRS impersonation and stolen medical records to romance scams, business email compromise, and why the best defense against all of it is simply friction.

Produced by Any Other Business

From lone hackers to organized crime

Erb’s central point lands early: the psychology behind fraud hasn’t changed since she started writing about it. The goal is always the same – get information from someone and use it against them. What’s changed is speed and believability. The obviously broken email, the telltale bad grammar, the Google-Translate stiffness that used to give a scam away, AI has largely erased those tells.

The bigger misconception, she argues, is who’s actually behind these schemes. The popular image of a solo opportunist has little to do with reality. Fraud at scale is run by organized crime, and it’s well resourced precisely because it’s profitable. That funding buys patience: criminal operations are willing to run a scam for months, because the eventual payoff justifies the wait.

Why engaging with scammers backfires

One piece of common advice – string a scammer along, waste their time, “let them have it” on the phone – gets a firm correction. Erb’s view: it doesn’t work, and it can actively hurt you. Answering the call at all confirms the number is live and that the person on the other end will engage. Even an angry, defensive conversation leaks information: mentioning a spouse coming home, a police officer in the family, or simply confirming your name and address all feed a profile that gets sold and resold. Her advice is blunt: don’t engage at all.

Beyond bank accounts: identity theft’s many uses

People tend to assume they’re safe from identity theft as long as their bank balance looks untouched. Erb walks through why that’s a dangerous assumption. Stolen identities get used to open credit cards, file for pandemic-era relief loans years after the fact, and file fraudulent tax returns claiming large refunds: one of her clients had a return filed in his name reporting one and a half million dollars in freelance income, with fabricated tax withholding designed to trigger a half-million-dollar refund.

She also traces a less obvious pipeline: medical offices. Older Americans, who see doctors more often, generate rich personal and financial profiles and fraud rings have shifted from trying to intercept people’s home Wi-Fi to simply paying underpaid data-entry staff at medical practices for records. That data gets combined with other stolen information to make tax fraud and other schemes far more convincing.

There’s also fraud that feeds on fraud. Victims who’ve already lost money are targeted a second time by people posing as attorneys or tax professionals, complete with AI-generated credentials, offering to “help” and instead completing the theft.

The templates fraud follows

Government impersonation, Erb says, remains one of the most reliable scam formats, and pandemic-era habits made it worse. COVID pushed people who’d never dealt with government services online to start doing everything – job interviews, doctor’s visits, benefits applications – remotely, normalizing the exchange of sensitive information with parties they can’t verify. That same shift explains why job-impersonation scams, where fraudsters pose as recruiters from major companies, spike every autumn as students and returning workers look for jobs.

Underneath both is the same emotional lever: urgency. A message that claims to be from a tax authority, warns of an imminent court summons, or threatens arrest works precisely because most people want to do the right thing and react immediately rather than pause to verify.

Who scammers target

A pattern runs through nearly every case Erb describes: fraud concentrates on people who are lonely, financially stretched, new to a system, or simply busy. Romance scams prey on isolation. Small business owners get flooded with fraudulent loan offers whenever the economy wobbles. Immigrants and older adults are disproportionately targeted, in part because fear of authority – deportation, an IRS letter – is such an effective trigger.

It isn’t limited to individuals, either. Erb points to the high-profile deepfake-enabled fraud at engineering firm Arup as an example of the same tactics playing out inside organizations, through business email compromise: a message that appears to come from HR or a traveling executive, asking someone to push payroll through urgently. The common thread, again, is that scammers want a decision made before anyone stops to ask whether it’s real.

Practical protection to fraud: creating friction

Erb’s advice for individuals comes down to a few repeatable habits:

• Pause on anything urgent. A message demanding immediate action – a summons, a same-day payroll change, a threat of arrest – is a signal to slow down, not speed up.
• Go to the source directly. Don’t call the number in the email or click its links. Go to the official website (she points to IRS.gov as the US example) or visit your bank branch in person.
• Ask a professional before acting. A tax question goes to a tax professional, a legal question to a lawyer. Most will confirm whether something looks legitimate without charging for the conversation.
• Talk to people you trust. Isolation and shame are what let long-running scams continue. Family members and friends who are told to keep a scheme secret should treat that instruction itself as a red flag.
• Use formal friction where it exists. Some financial institutions in the US now allow customers to designate a “trusted contact” who gets notified before unusual withdrawals go through – a simple mechanism that gives someone a chance to ask “why are you doing this?” before money moves.

The role of media and storytelling on fraud

Erb pushes back on how scam victims are often portrayed in the press and on social media, as gullible or foolish. She argues that framing does real harm: it discourages people from reporting, which in turn denies law enforcement the pattern data they need to act, and it deepens the shame that keeps victims silent while a scheme is still in progress.

Her preferred approach, drawn from her own reporting for Forbes, is to center the humanity of the people involved: a retired couple who lost their savings, a pastor and his wife who were “insanely compelling and lovely,” in her words, before they were targeted. Sharing enough detail that others recognize the pattern matters; sharing so much salacious detail that it risks inspiring copycat schemes does not. The balance, she says, is the same one journalists strike when covering suicide or violence responsibly: informative without being a blueprint.

Where this is heading

Asked what the next one to two years look like, Erb expects scammers to keep getting more sophisticated and to keep targeting people who rely more heavily on technology which, increasingly, is everyone. But she’s not entirely pessimistic. Law enforcement and financial institutions now have access to many of the same tools fraudsters do: mandatory authentication on government platforms, and predictive systems at banks that flag anomalous behavior, like a retirement account holder suddenly making a withdrawal that doesn’t match their history.

Her closing point is that resourcing, not technology, is the constraint. Fraud fighting is expensive, and scammers treat this as a full-time, well-funded profession. Keeping pace means continued investment, not a one-time purchase of a tool and calling the problem solved.

Listen to the full episode: Inside the business of fraud

This is episode three of the podcast Veriff Voices Deepfakes Series. Catch the full conversation between Anisah Osman Britton and Kelly Phillips Erb.

About the guest – Kelly Phillips Erb

Kelly Phillips Erb is a tax attorney, writer, speaker, and the creator of Taxgirl®. She’s also a managing shareholder at The Erb Law Firm, P.C., where she helps taxpayers get out of – and hopefully stay out of – trouble. With more than 25 years of experience in tax law, Kelly has spent much of her career translating complicated tax rules into something actual humans can understand.

Through Taxgirl.com and her newsletter, Kelly writes about taxes, tax policy, the IRS, financial crime, and the sometimes strange stories behind the headlines. She’s particularly interested in how scams evolve, how technology, including AI and deepfakes, is changing the way fraudsters operate, and why even smart, skeptical people can get fooled.

Previously a senior writer at Forbes and a staff writer at Bloomberg Tax, Kelly’s work and commentary have appeared in outlets including CNN, CNBC, NPR’s Marketplace, the BBC, Reuters, and The Philadelphia Inquirer.

When she’s not writing, practicing law, or explaining why that suspicious email probably isn’t from the IRS, Kelly enjoys traveling, cheering on the Phillies, and explaining to her kids why they can’t move to Europe – this week.