COVID fraud statistics released ahead of the 3rd anniversary of the CARES Act
ATLANTA – Three years after the enactment of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, IRS Criminal Investigation (IRS-CI) 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 individuals have been indicted for their alleged COVID-related crimes, and 236 individuals have been sentenced to an average of 37 months in federal prison. Throughout the three years, CI has a nearly 100% conviction rate in prosecuted cases.
“The hundreds of convictions for CARES Act fraud sends a message to criminals that IRS-Criminal Investigation special agents will continue their pursuit for justice on behalf of law-abiding taxpayers,” said James E. Dorsey, Special Agent in Charge, IRS Criminal Investigation, Atlanta Field Office.
The Atlanta Field Office covers the states of Alabama, Georgia, Louisiana, and Mississippi.
COVID-related crimes the IRS-CI Atlanta Field Office investigated include:
- Leone Buchieri of Lawrenceville, Ga., was sentenced on Feb. 6, 2023, to 19 months in prison, 24 months’ probation, and ordered to pay $472,248 in restitution. Buchieri falsified PPP loan applications by creating false bank statements and claiming he paid employee wages totaling hundreds of thousands of dollars when he did not have any employees. Buchieri used the fraudulent proceeds to purchase a luxury vehicle and other items.
- Janola Massaquoi of Shreveport, La., plead guilty on September 1, 2022, to making false statements to a federal agency. Massaquoi used $250,000 of a COVID-19 Economic Injury Disaster Loan for her personal use. Massaquoi sentencing is scheduled for May 15.
- Janola used the funds for a variety of personal expenses including a down payment on the purchase of a personal residence and mortgage payments. Massaquoi also withdrew over $30,000 in cash, transferred over $50,000 to friends and family members, and used approximately $83,000 to fund her personal investment and retirement accounts. In total, Massaquoi used $250,000 of the EIDL proceeds for her personal use.Read more at: https://www.lobservateur.com/2022/09/02/shreveport-businesswoman-pleads-guilty-in-cares-act-fraud-scheme/
- Jason Carl Pears of Fairhope, Al., was sentenced on Nov. 22, 2022, to 30 months’ imprisonment and ordered $1.2 million dollars in restitution. After successfully securing over $1.2 million in PPP loan funds, Pears spent the money items, including luxury goods and real estate.
“IRS-CI is proud to lead the fight against COVID-related fraud. Any criminal looking to exploit the CARES Act should know that there are consequences for stealing from hardworking Americans.” said IRS-CI Chief Jim Lee.
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.
To learn more about COVID-19 scams and other financial schemes visit IRS.gov. Official IRS information about COVID-19 and Economic Impact Payments can be found on the Coronavirus Tax Relief page, which is updated frequently.
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 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.