GILLETTE, Wyo. — Three years after the enactment of the Coronavirus Aid, Relief, and Economic Security, or CARES, Act, IRS Criminal Investigation has investigated 975 tax and money laundering cases related to COVID fraud with alleged fraud in these cases totaling $3.2 billion.
These cases include a broad range of criminal activity, including fraudulently obtained loans, credits and payments meant for American workers, families, and small businesses.
Of those cases, 458 people have been indicted for their suspected COVID-related crimes, and 236 have been sentenced to an average of 37 months in federal prison. Throughout the three years, IRS-CI has a nearly 100% conviction rate in prosecuted cases.
“IRS-CI is proud to lead the fight against COVID-related fraud. Criminals looking to exploit the CARES Act victimize the American businesses and families these programs were designed to protect, and these crimes will not go unpunished,” said Andy Tsui, Special Agent in Charge, Denver Field Office.
Case examples include:
- Gillette woman sentenced to federal prison for false claims and COVID relief fraud: Alexa Kinney of Gillette was sentenced on May 19, 2022, to serve 33 months in prison, followed by three years of supervised release, in addition to paying $172,400 in restitution to her victims.
In less than one year, Kinney created three separate schemes to defraud others for her own benefit. The schemes included obtaining funds from an investor using fraudulent investment properties, using another individual’s credit card without their authorization, and submitting a false statement to the IRS to claim Economic Impact Payment Kinney was not entitled to.
In her EIP refund request, she claimed she was not required to file a tax return for 2019 because her gross income for the year was less than $12,200 when she received at least $165,000 in taxable income that year from her previous schemes.
IRS-CI encourages the public to share information regarding known or suspected fraud attempts against any of the programs offered through the CARES Act. To report a suspected crime, taxpayers may visit IRS.gov.
The CARES Act was signed into law on March 27, 2020, to provide emergency financial assistance to millions of Americans suffering the economic effects of the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP. In April 2020, Congress authorized over $300 billion in additional funding, and in December 2020, another $284 billion.
The PPP allows qualifying small businesses and certain other organizations to receive loans with a maturity of two to five years and an interest rate of 1%. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.
IRS-CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. IRS-CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, boasting a more than a 90% federal conviction rate.