Laguna Beach Man In Jail For Wrongfully Receiving $110,000 IRS Tax Refund Mistake

Laguna Beach Man In Jail For Wrongfully Receiving $110,000 IRS Tax Refund Mistake

Stephen McDow, a Laguna Beach, CA man wrongfully received $110,000 deposited in his bank account, KCAL 9 reported. It was none other than the IRS who wrongfully deposited those funds into the man’s bank account. It was another person’s tax refund that was wrongfully deposited in his account after the senior citizen provided the IRS with the wrong bank account information.

The Laguna Beach resident used the funds to pay down his debts, including his mortgage and student loans. Once contacted by the IRS McDow admitted to having received $110,000 and that he used $65,000 to pay down his real estate loan on a family Maryland home and his car loans.

Prosecutor Lockart stated that the bank account error was due to Citibank re-assigning the account number to McDow after the account has been closed in 2004. The 67 year Los Angeles women provided the IRS with an old account number on her efiling for her federal taxes. If that is true it’s none other than the filers mistake.

He said look I screwed up, I spent it on my student loan and I spent it on my home mortgage. It doesn’t sound like that this man exercised criminal intent anywhere along the way” tax attorney Jerry Unis, who is not associated with this case, said.

McDow’s family informed the media that Stephen McDow offered to return the unspent funds while making monthly payments on the remaining balance but that the offer was declined. Stephen McDow now faces grand theft charges by the OC District attorney for having stolen money that he did not steal. Stephen McDow is currently in jail being held on $110,000 bail while facing up to four years for a crime he did not commit.

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This post was written by:

Jesse Livermore - who has written 99 posts on WTF Finance.

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  • MS

    Unless he had reason to believe that he was due a payment or refund of $110k from the IRS (such as a filed tax return), what McDow should have done is contact the IRS immediately upon discovering the direct deposit into his bank account.

    By failing to contact IRS to at least find out why he received such an amount in his account and then converting this deposit for his own personal use, he committed theft.

    In a similar situation, one of my investment companies (Pershing) mistakenly paid the IRS $73k in taxes on one of my accounts. IRS brought this situation to the attention of the company and immediately refunded the mistaken payment back into my account.

    It was all taken care of in a matter of days.

    One of the reasons this country is going to hell is because of dishonesty and attempting to make a quick buck off of someone else’s vulnerability, in this case an elderly person who made a simple mistake.

    • Nepolean Spence

      I am not sure of the details you speak of. However, “dishonesty” I am not sure. However, this is his side of the story.

  • Anonymous

    I agree that he should not have spent the money. ok.

    However, what is stranger to me is that what Senior Citizen (probably on fixed income) was entitled to a Federal REFUND of $110k !?!  Doing some quick math, that is a very serious level of income (and taxes paid) to get a refund that HUGE!

    That would be a more interesting story to me.

  • Kostas

    Simple rule of life…if you take something that’s not yours, it’s called stealing.

  • Nepolean Spence

    MS needs to wait to get all of the facts…..   He didn’t steal the money in question….

  • Nepolean Spence

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