Fraud claims rock US auto scheme

AMERICA'S cash-for-clunkers scheme gave the US auto industry a much needed boost during the recent global financial crisis.

And according to a new report it was also a financial boost for prisoners and dead people.

Reuters has reported that an investigation by the tax department watchdog found that there was more than $US150 million worth of fraudulent claims under the scheme.

Included in that amount were more than 400 prisoners, who managed to make claims for vehicles purchased during the scheme despite being locked up. There were 18 children under 15 identified and even some people who were deceased.

"While no amount of fraud is acceptable, more than 4.3 million taxpayers claimed more than $7.2 billion in qualified motor vehicle deductions and only a small percentage involved questionable claims," read a statement from the Internal Revenue Service.

The Australian Government had planned to implement a cash for clunkers scheme, whereby old cars would be bought by the government for more than their market value and the money used to buy a new car.

The idea is to get older cars off the road and get people driving newer, safer, more efficient vehicles. But plans to implement the scheme were later dropped.



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