Federal indictment alleges multimillion-dollar fraud involving pandemic tax credits.
Federal prosecutors have charged two men in connection with an alleged scheme that sought more than $52 million in COVID-19-related tax credits through hundreds of fraudulent tax filings. According to the U.S. Department of Justice (DOJ), Christopher Slater of California was arrested after a federal grand jury returned an indictment charging him with conspiracy, mail fraud, and money laundering. Prosecutors allege that Slater played a leading role in a multi-state operation that improperly obtained pandemic relief funds intended to help businesses affected by COVID-19.
The fraud case centers on two federal tax credit programs created during the heigh of the pandemic. One program, known as the Paid Sick and Family Leave Credit, was designed to reimburse employers that continued paying workers who were unable to work because of COVID-19-related illness or family care responsibilities. Another program, the Employee Retention Credit, was created to encourage businesses to keep employees on payroll during the economic disruptions as the lockdowns were happening. Federal authorities allege that Slater and others recruited business owners and used business information to submit false tax returns seeking refunds through these programs. According to the indictment, the fraudulent filings contained claims for credits that the businesses were not entitled to receive.
Prosecutors stated that the scheme involved at least 290 tax returns filed on behalf of 35 businesses. Those filings allegedly requested more than $52.7 million in pandemic-related tax credits. The government claims that the Internal Revenue Service ultimately paid more than $32.2 million based on the false submissions. Investigators allege that the operation did not stop with filing the tax returns. Instead, Slater and associates took steps to move and conceal the proceeds after the funds were issued. Authorities claim this activity formed the basis for the money laundering charges included in the case.
The indictment also charges Mark Keagel of York, Pennsylvania. Prosecutors allege that Keagel owned two businesses that were no longer operating and provided information about those companies to one of Slater’s alleged associates. According to court documents, false tax returns were then submitted using the businesses’ information. The IRS ultimately mailed approximately $3.6 million in Treasury checks connected to those filings.
The allegations represent one of the larger pandemic tax credit fraud cases announced this year. Since the end of the COVID-19 public health emergency, federal investigators have continued examining claims submitted through various relief programs. Authorities have repeatedly warned that emergency aid programs became targets for fraud because large amounts of money were distributed in a relatively short period of time.
If convicted, Slater could face significant prison time. The DOJ stated that each mail fraud and mail fraud conspiracy charge carries a potential sentence of up to two decades behind bars. Both Slater and Keagel could face up to 10 years in prison on each money laundering-related charge. Keagel also faces potential prison sentences tied to the theft of government property counts.
Federal officials said the case reflects ongoing efforts to recover taxpayer funds and pursue individuals accused of exploiting pandemic relief programs, warning fraudsters that government agencies have increased scrutiny of COVID-19 assistance programs in recent years. The case will now move through the federal court system, where prosecutors must present evidence supporting the allegations.
Sources:
Two men charged in $52 million COVID-19 tax credit fraud conspiracy
U.S. charges two men over $52.7 million COVID-19 tax credit fraud scheme
Join the conversation!