So the IRS has no way of validating these numbers (they do require brokers to provide the numbers these days)? Overall I'm just not buying that this story is true, in other words.
What makes you think the operators are giving correct numbers to the IRS, or that the IRS would necessarily detect something like that on a fairly small scale?
(I have no idea how any of this works, but I would assume that if they're willing to defraud their own customers they're probably not acting entirely above board on the associated tax paperwork either.)
