IRS CI Continues to Target COVID-19 Relief Tax Fraud

Hot Topics, Offshore Account Update

Posted on September 17, 2021 |

The federal government is continuing to crack down on individuals and businesses suspected of defrauding (and attempting to defraud) the government’s COVID-19 relief programs. The Internal Revenue Service’s Criminal Investigation Division (IRS CI) has been particularly active, announcing a dozen such cases in August and September alone.

We first covered this topic in early August. In an article titled, IRS CI is Investigating Taxpayers Suspected of COVID-19 Relief Fraud, New Jersey criminal tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group, explained the charges IRS CI is investigating and the penalties taxpayers can face if prosecuted. In this article, we take a look at some of IRS CI’s recent COVID-19 relief tax fraud cases:

Man Pleads Guilty to Submitting False Tax Documents with PPP and EIDL Applications

A man who applied for approximately $150,000 in loans under the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program is facing sentencing after he pleaded guilty to submitting false documents in support of his PPP and EIDL applications. Among other falsified information, the man claimed to have employed four individuals and paid wages totaling $440,000 in the year prior to the start of the pandemic. In addition to paying restitution, the man faces up to 20 years in federal prison and a $250,000 fine.

Fintech CEO Sentenced to Six Years for COVID-19 Relief Tax Fraud and Other Crimes

In a similar case, the CEO of a financial technology company was sentenced to six years in federal prison for fraudulently seeking more than $7 million in PPP and EIDL loans. IRS CI reports that the individual “submitted fraudulent and doctored tax records that were never actually filed with the IRS,” in addition to making various other false and fraudulent claims.

Another Tech CEO Faces Two Years for Submitting False Tax Returns In Order to Obtain PPP Funds

In yet another similar case, a technology company CEO received a two-year sentence for submitting fraudulent applications for more than $5.5 million in PPP loans—and ultimately obtaining $1.8 million from PPP lenders. According to IRS CI, the CEO “submitted false incorporation documents and tax forms,” and falsely claimed that his company had paid millions of dollars in wages and payroll taxes for dozens of employees. In fact, IRS CI reports, the company did not have any employees or conduct any business during the relevant time period.

These are just a few of numerous recent examples, and IRS CI shows no signs of slowing down. Submitting falsified tax information in an effort to obtain government-backed loans is a serious criminal offense, and fraud related to the COVID-19 pandemic is currently a top federal law enforcement priority. As a result, we expect these types of investigations to continue, and individuals targeted in these investigations must be prepared to defend themselves by all means available.

Contact New Jersey Criminal Tax Attorney Kevin E. Thorn, Managing Partner of Thorn Law Group

Are you under investigation for COVID-19 relief tax fraud? If so, you need highly experienced defense counsel. To speak with New Jersey criminal tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group, in confidence, call 201-355-8202, email or contact us confidentially online now.

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