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COVID-Related Fraud Remains a Priority for IRS CI in 2022

News, Offshore Account Update

Posted in on January 31, 2022

Since the start of the pandemic, combatting COVID-related fraud has been a priority for the Internal Revenue Service’s Criminal Investigation Division (IRS CI) and other federal law enforcement authorities. Based on IRS CI’s enforcement activity in January, it appears that combatting COVID-related fraud remains a priority in 2022, and individuals and businesses that are under investigation (or concerned about facing an investigation) should consult with a Maryland criminal tax attorney promptly.

Here are some examples of IRS CI’s COVID-related criminal cases so far in 2022:

PPP Loan Recipient Sentenced to 33 Months in Federal Prison

On January 6, IRS CI announced that a Paycheck Protection Program (PPP) loan recipient had been sentenced to 33 months in prison and ordered to pay approximately $3 million in restitution and forfeitures. According to IRS CI’s press release, the individual submitted multiple fraudulent PPP loan applications in 2020, including fake tax returns and other falsified documents with his applications. Notably, the individual was not prosecuted for tax crimes, but instead for wire fraud in relation to a disaster benefit program and engaging in monetary transactions in criminally-derived property.

Recipient of $3.4 Million in PPP and EIDL Loans Forced to Forfeit 25 Properties and 15,000 Shares of Tesla Stock

Also on January 6, IRS CI announced that an individual who fraudulently obtained multiple PPP loans and Economic Injury Disaster Loans (EIDL) had been ordered to pay more than $4 million in restitution in addition to forfeiting 25 properties and more than 15,000 shares of Tesla stock. The individual pleaded guilty to bank fraud, money laundering and aggravated identity theft following an investigation conducted by IRS CI, the Federal Bureau of Investigation (FBI), and the U.S. Small Business Administration Office of Inspector General (SBA OIG).

False PPP and EIDL Applications Lead to Charges for Tax Fraud and Other Crimes

On January 13, IRS CI reported that an individual who fraudulently obtained more than $1.2 million in PPP and EIDL funds received a two-year federal prison sentence after pleading guilty to tax fraud and other crimes. In addition to submitting false PPP and EIDL loan applications, the individual also admitted to fraudulent tax return preparation.

Tax Preparer Pleads Guilty to Falsifying PPP and EIDL Applications and Preparing Fraudulent Returns

On January 18, IRS CI announced that a tax preparer will spend five years in federal prison as a result of pleading guilty to submitting fraudulent PPP and EIDL applications and preparing false tax returns for his clients. According to IRS CI, the tax preparer submitted applications in his own name in the names of “unwitting associates or relatives.” He also pleaded guilty to including, “bogus Schedule C losses from businesses, false Schedule 1 Adjustment to Income deductions, false Household Employee income, and false W-2 wages,” on clients’ returns in order to increase their refunds.

Request an Appointment with Maryland Criminal Tax Attorney Kevin E. Thorn

Maryland criminal tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group, represents individuals and businesses in IRS CI matters involving allegations of tax fraud and other crimes. If you or your business is under investigation, you can call 240-235-5096, email ket@thornlawgroup.com or send us a message online to arrange a confidential consultation.

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