SALEM, Ore. - A Salem woman is accused of defrauding Oregon's Department of Revenue out of $2 million by filing a false tax return and then using a state-issued debit card.
Court documents show 25-year-old Krystle Marie Reyes used the Turbo Tax preparation program to file a 2011 return showing earnings of over $3 million. The exact amount was not specified.
She claimed a return of $2.1 million and the state issued her a Visa debit card for that amount.
Police said Reyes then went on a spending spree, spending over $150,000 from February until May while she had the card. She bought a used van and was seen driving it for the last month, according to the documents.
Investigators said Reyes was seen using the debit card "during all transactions" captured on video at various business.
Officials found out about the bogus tax return when Reyes reported a second debit card was lost or stolen to Turbo Tax. Then Turbo Tax contacted state officials.
She was arrested at her home on Pine Street in Salem on Wednesday.
The tax return was manually approved by reviewers, and the Oregon Department of Revenue said Thursday it will re-examine big refunds to ensure there were no additional blunders.
Derrick Gasperini, a Revenue Department spokesman, said the size of the refund claim triggered the woman's return to be flagged for an inspection. Multiple people looked at the electronic document and erroneously approved the massive refund, said Gasperini, adding that the highest-level reviewer is ultimately responsible.
"We do not have that many $2.1 million refund claims," he said. "It absolutely should have been caught and was not."
Because of the mistake in approving Reyes' return, Gasperini said the Revenue Department, which processes $7 billion in tax returns each year, will review its internal controls to make sure a similar error does not happen again. Moreover, reviewers will take another look at all large-dollar refunds to determine if the state authorized other incorrect and expensive refunds.
"We're looking at the largest ones and working down the list to the smaller and smaller ones," he said. "I'm not exactly sure where we are stopping."
Steven Dubois of The Associated Press contributed to this report.