Scandal in its history. Can one of americas top c. E. O. S fix it . How long is that going to take . Well, its going to take time. The news media is not helping me, right, because every adverse outcome that gets amplified by the media doesnt help me. Pelley youve got a bad reputation. I do. But were changing it. Im a oneway motorway. Cooper the foo fighters may be americas best rock n roll band, but thats not the only reason theyre on 60 minutes tonight. Theyre also in the midst of one of the most interesting music projects weve ever seen. You know im not in the clear. Cooper dave grohl, the bands leader, invited us along to watch as they traveled to eight american cities, interviewed some of the most influential musicians to record all thats great about American Music. Im steve kroft. Im lesley stahl. Im morley safer. Im Anderson Cooper. Im bill whitaker. Im scott pelley. Those stories tonight on 60 minutes. Cbs money watch update sponsored by lincoln financial. Calling all chief life officers. Glor good evening. Greek banks will not open monday after the European Central bank refused to extend emergency credit. An unmanned spacex rocket bound for the International Space station exploded shortly after liftoff. And air b b says the company owes 125. 5 billion. Im jeff glor, cbs news. Across america people, like Basketball Hall of Famer Dominique wilkins, are taking charge of their type 2 diabetes. With noninsulin victoza. For a while, i took a pill to lower my blood sugar but it didnt get me to my goal. So i asked my doctor about victoza. He said victoza works differently than pills and comes in a pen. Victoza is proven to lower blood sugar and a1c. Its taken once a day, any time. And the needle is thin. Victoza is not for weight loss but it may help you lose some weight. Victoza is an injectable prescription medicine that may improve blood sugar in adults with type 2 diabetes when used with diet and exercise. It is not recommended as the first medication to treat diabetes and should not be used in people with type 1 diabetes or diabetic ketoacidosis. Victoza has not been studied with mealtime insulin. Victoza is not insulin. Do not take victoza if you have a personal or Family History of medullary Thyroid Cancer multiple endocrine neoplasia syndrome type 2, or if you are allergic to victoza or any of its ingredients. Symptoms of a serious allergic reaction may include swelling of face lips, tongue or throat fainting or dizziness, very rapid heartbeat problems breathing or swallowing, severe rash or itching. Tell your doctor if you get a lump or swelling in your neck. Serious side effects may happen in people who take victoza including inflammation of the pancreas pancreatitis which may be fatal. Stop taking victoza and call your doctor right away if you have signs of pancreatitis, such as severe pain that will not go away in your abdomen or from your abdomen to your back with or without vomiting. Tell your doctor about all the medicines you take and if you have any medical conditions. Taking victoza with a sulfonylurea or insulin may cause low blood sugar. The most common side effects are nausea, diarrhea, and headache. Some side effects can lead to dehydration, which may cause kidney problems. If your pill isnt giving you the control you need. Ask your doctor about noninsulin victoza. Its covered by most health plans. Kroft there have been lots of stories over the past few months on Identity Theft, and how the information can be used against you. You may have heard something about stolen identity tax fraud; you may even have been a victim of it. Its the biggest tax scam around right now. As we first reported in september, this is how it works someone steals your identity files a bogus tax return in your name before you do, and collects a refund check from the i. R. S. Its so simple, you would think it would never work, but it does. Its been around since 2008, and youd think the i. R. S. Would have come up with a way to stop it it hasnt. Instead, the scams gone viral tripling in the last three years. The government says its affecting millions of americans and costing taxpayers billions of dollars every year, proving once again what every good con man already knows there is no underestimating the general dysfunction and incompetence of government bureaucracy. Wilfredo ferrer its a tsunami of fraud that we have been encountering. The vast number of fraudulent tax returns was something that i dont think the i. R. S. Ever really was ready for. Kroft Wilfredo Ferrer is the United States attorney for southern florida and george piro the agent in charge of the Miami Field Office of the f. B. I. Together, they run a federal task force operating at the epicenter of the largest tax scam in the country. Ferrer florida has been for the third year in a row on the top, number one, in terms of i. D. Theft complaints. And miami is also number one in terms of metropolitan areas that suffer from identity fraud. Kroft dont take this the wrong way is there any scheme that miami is not number one at . Ferrer we have very sophisticated and good criminals, steve, who. Who know how to. How to, you know, defeat the system. Kroft for decades now, south florida has been the Silicon Valley for scam artists, drawn here by the weather, the beaches, and the opportunity to make lots of money without actually doing much work. Theres medicare fraud, mortgage fraud, securities fraud, and now what the Justice Department calls stolen identity tax refund fraud, a tax preparation scheme epitomized by an over abundance of questionablelooking establishments that have sprung up here over the past few years. But this scam is so easy, you dont even need an office. Ferrer for this fraud, all you need is a laptop, someones Social Security number, date of birth, not even their name. They can do it from their kitchen table. They can do it at a fast food chain restaurant. Or they can do it on the beach as long as they have wifi access. Kroft actually, Corey Williams says you dont even need a laptop. You can file phony returns on your cell phone, if you have the right app. He used to be a legitimate tax preparer until his boss turned him on to the scam. Before he was arrested and sentenced to 40 months in prison, he had made millions and millions of dollars. Corey williams anybody who knew about it, youd be a fool to not. Not try to get involved with making some money. I could wake up in the comfort of my own home, and just get on a laptop, do about 15 returns a day. 15 times 3,000 a return, thats 45,000 a day. Kroft so you had a home office . Williams yeah. I used to work in. I would work in my boxers and a tshirt, yeah. Kroft it as easy as one, two, three. Williams gave us a demonstration. One you collect or buy a list of stolen identities that are readily available in miami, if you know the right people. Two you go to one of dozens of tax preparation sites online and using the stolen Social Security numbers and dates of birth, you fill out a completely bogus w2 form, claiming a modest refund of a few thousand dollars. Williams it has given us a refund of 4,834. Kroft three you tell the i. R. S. Where to send the money your house, your bank account, or loaded onto a prepaid debit card. Do you have any idea how many returns. How many bogus returns you filled out . Williams has to be like in the thousands. Kroft did the i. R. S. Pay all of it . Williams on a percentage range, youd say they would pay out 40 of the tax returns. Kroft once you hit send, how long did it take you to get a check . Williams seven days. Kroft seven days . Williams yes. Kroft so youd send in these returns, and seven days later, youd get a check . Williams yes. Kroft 40 of the time . Williams 40 of the time. Kroft where would you have them send the check . Williams you can send the checks to an address, any address. Ive seen cases where 25 checks came to one address, and the mailman delivered it. Kroft it sounded so outrageous, we wanted to run it by the federal task force. So you just put down a name and a Social Security number, and you can make up an employer, or the amount of money that was earned and withheld. Ferrer thats it. Kroft . And send it off to the i. R. S. , and theyll send you a check back for the refund . Ferrer they will pay, most of the time, unless they catch that theres some fraudulent you know, information. And then, its our job to chase. Kroft im still amazed that you dont need to provide any documentation when you file your tax return. George piro there are no supporting documents when you are filing electronically. And thats the ease or the convenience that was created for the benefit of the innocent taxpayer, which is now being exploited by criminals. Kroft you would think that the i. R. S. Computers would notice that they were sending thousand of checks to a handful of addresses, but they didnt. And you might expect that the i. R. S. Would match taxpayer returns with legitimate w2 forms filed by employers. It doesnt do that either because the law requires refund checks to be sent out within six weeks, and employer w2s are often not available until months later. So, if a bogus return is received before a legitimate one, the check will go out to the crooks. Ferrer the way that you learn that you become a victim of this is when you go and try to file your return, the i. R. S. Tells you, oh, youve already filed. Youre like, no, i havent. Well, like, yes, you have. Well, it wasnt you, it was the fraudster who used your identity to file the return. Kroft and its not an easy problem to get fixed. Many of the people in this line outside the i. R. S. Office in plantation, florida, are victims of the fraud, waiting to prove their identity and claim their rightful refund. They will eventually be reimbursed, but it can involve massive amounts of paperwork multiple visits to the office, and months and months of waiting. Did you know about this before you got this job . John koskinen i had no idea about this before i started getting briefed last fall. Kroft John Koskinen is the commissioner of the i. R. S. Its fourth commissioner in just two years. Its become a highturnover position in part because the agency has been beset by a number of embarrassing problems including stolen identity tax fraud that have led people to question its competency. It looks to me like the i. R. S. Got really outsmarted by some people who were not all that bright, were not all that ingenious. Koskinen what happened was a lot of people discovered that Social Security numbers are, a either easy to steal or find or buy; and then, b you can file a false return. Kroft why didnt anybody anticipate that . Koskinen well, i think it goes back to the fact that people didnt anticipate Social Security numbers were going to be so readily available. The assumption was until fairly recently was a part of your identity that you protected and took great care of, so that no one actually ever expected that they would be this easy to get a hold of. Kroft but there were plenty of warnings. The Senate FinanceCommittee Held hearings on stolen identity refund fraud way back in 2009 when theni. R. S. Commissioner Douglas Shulman testified. Douglas shulman i discussed the issue of Identity Theft with the Senior Leaders at the i. R. S. My first day on the job. Kroft there were more hearings in 2011, and another in 2012 with deputy i. R. S. Commissioner steve miller. Steve miller we cannot stop all Identity Theft however we are better than we were and we will get better still. Kroft in those ensuing years, the number of cases of stolen identity refund fraud has risen from 51,000 to nearly three million. Ferrer in the year 2012, the department of treasurys Inspector General predicted that by the year 2016, irs will be hemorrhaging, and losing 21 billion due to this type of fraud. Kroft its only 2014. Dont you think something can be done in the next two years to fix this . Ferrer well, that is my hope. Kroft but it will not be easy. The entire i. R. S. System uses Social Security numbers as its primary means of identifying taxpayers. Even though they are now ubiquitous in public, private and corporate files, just waiting to be stolen by thieves. Ferrer the key to this is to have somebody in the inside, or someone who has access to our Social Security numbers, to our date of births. And a lot of these individuals are insiders in big institutions in banks, hospitals, schools, clinics. Williams we would approach anyone who worked at like a dental office, anybody who worked in a medical field. You would tell them if they get you 100 names, you would give them 1,000. Kroft these people easy to find in miami . Williams very easy. Very easy. Kroft because you would think if you went in and started knocking on doors and asking people that worked at hospitals and doctors offices and dentists office, somebody would call the cops. Williams no, they. They needed the money more than they wanted to call the cops. Everybody was with it, everybody was with the scam. Kroft was this like a community of people doing this . Williams more like a. A nation of people doing this. Kroft its gone from hundreds of people filing hundreds of fraudulent returns to thousands of people filing millions of fraudulent returns and its become much more organized. U. S. Attorney ferrer says some people are even setting up franchises. Ferrer we have had defendants, masterminds of these schemes, engage in filing parties. And what they do is that they invite their friends to a hotel room or to an apartment, and then they tell them how to do it in return for a cut of these tax returns. Kroft you make it sound like amway or tupperware. Ferrer thats what weve seen. Kroft even ferrers old boss, u. S. Attorney general eric holder, has had his identity stolen in an i. R. S. Refund scam. And a number of members of the task force have also been victimized, including North Miami BeachPolice Officer rocky festa, who says local Police Departments have been hit hard. Rocky festa aventura had nearly their entire department which was 50someodd officers got hit. Davie fire and davie police, it was in the hundreds. They were all victims of tax return fraud. Kroft festa and his partner Craig Caitlin now work exclusively on tax refund cases and were among the first to discover the breadth of the scam five years ago when they began finding tax documents and stacks of prepaid debit cards when they pulled over suspicious vehicles. Craig caitlin here is a wire plastic with a card. Kroft you can get one of these prepaid debit cards almost anywhere, usually without providing identification. You then deposit and withdraw money from it as needed. Its like a bank account for people who dont have one. Now is that a visa. A real visa card . Caitlin its a real visa card and you can buy. Kroft so you can go in a Convenience Store and buy a visa card . Caitlin right off the shelf. Kroft if you want, the i. R. S. Will electronically deposit tax refunds directly onto these cards, no questions asked, eliminating the need for crooks to ever actually set foot inside a bank or try to cash a refund check. They can spend the money in stores, or withdraw it from a. T. M. S. So is this kind of like a throwaway phone . Caitlin yes, sir. Yeah, once the money goes on the card, you empty the money off on a. T. M. S and you put the card in the garbage. Its pretty good. Kroft the prepaid cards are now used by millions of americans to collect 142 billion in government entitlements, like Social Security and medicare payments. I. R. S. Commissioner koskinen thinks its an invitation to commit fraud. Koskinen the prepaid cards are the currency of criminals. Our problem is you cant distinguish the number of a prepaid card from a legitimate bank account. Kroft almost impossible to trace, right . Koskinen it is almost impossible to trace. Kroft why doesnt somebody put an end to that . Koskinen there are significant percentages of the population that were unbanked, as it were called. If you dont allow them to use a prepaid card, they are going to have to get a check and theyll have to pay somebody a lot of money to cash that check. So you are disadvantaging a significant amount of the population. Kroft and empowering a criminal network . Koskinen and you are empowering a criminal network. Kroft five years into the scam, the i. R. S. Still cannot not tell if the person filing the return and claiming the refund is actually the real taxpayer. By comparison, the Credit Card Companies are much better at flagging suspicious charges before they are paid out. Credit Card Companies dont have that much of a problem with this. Why cant the i. R. S. Do that . Koskinen so thats the direction in which were going. Its a significant move into the what i call the 21st century. Were still kind of in the late 1900s. But this is. Its still a big problem that, while we are making great progress, weve got a lot of work to do. Kroft and theyre having trouble keeping up with the con artists. Last month, the i. R. S. Announced that hackers had busted into its Computer System and stolen another 104,000 taxpayer identities, which so far have been used to collect nearly 50 million in bogus refunds. As for Corey Williams, he is now in jail serving his 40month sentence. We live in a world of mobile technology, but it is not the device that is mobile, it is you. When there is a game when there is a training when there is a goal, our duty is to bring that information as fast as possible to the people. Real madrid have about 450 million fans. Were trying to give them all the feeling of being at the stadium. The