IRS-CI releases latest COVID-related fraud investigational statistics

On Monday, March 28, the IRS Criminal Investigation (IRS-CI) released investigational statistics regarding COVID-related fraud investigations conducted by the agency over the past two years.

According to the IRS, the agency investigated 660 tax and money laundering cases related to COVID fraud, with alleged fraud in these cases totaling $1.8 billion. These cases included a broad range of criminal activity, including fraudulently obtained loans, credits and payments meant for American workers, families, and small businesses. 

The Coronavirus Aid, Relief, and Economic Security or 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 Paycheck Protection Program (PPP). In April 2020, Congress authorized over $300 billion in additional funding, and in December 2020, another $284 billion.

The CARES Act to act as a safety net for Americans in light of an unprecedented health crisis, IRS-CI Chief Jim Lee said in a statement.

“Unfortunately, even during times of crisis, criminals pop their heads out to look for ways to take advantage of those in their most vulnerable state. Thanks to the investigative work of IRS-CI special agents and our law enforcement partners, we’ve ensured criminals who try to defraud CARES Act programs face consequences for their actions,” he said.

The IRS Criminal Investigation’s law enforcement efforts directly impact the public’s confidence in federal tax laws and assistance programs, according to Special Agent in Charge, IRS Criminal Investigation Denver Field Office Andy Tsui. 

“Our special agents are committed to identifying and investigating individuals attempting to defraud the federal government for their personal gain and sending a clear message to criminals that they will be held accountable for their actions,” Tsui said.

Those consequences include a 100% conviction rate for prosecuted cases with prison sentences averaging 42 months.

The IRS Criminal Investigation Denver Field Office conducts investigations throughout Wyoming, Colorado, Montana and Idaho.

Case examples include:

• Helena man sentenced to federal prison for bank fraud in COVID-19 relief scheme. Kasey Wilson was sentenced to one year and one day in federal prison and ordered to pay $125,000 in restitution for orchestrating a scheme to receive PPP loan payments. Wilson and a co defendant made false statements on a PPP loan application stating their company paid payroll taxes and had 34 employees. The company never paid payroll taxes and had no employees other than Wilson and the codefendant.

• Idaho human resources manager sentenced to 41 months in federal prison for payroll and COVID-19 testing schemes.

Douglas Wold of Meridian, Idaho was sentenced to federal prison for wire fraud, mail fraud, and money laundering based on schemes to defraud his employer. Wold committed fraud with respect to a COVID-19 testing program by issuing a fraudulent invoice to Fry Foods Inc. in the name of his business, Hala Lallo Health. When Fry Foods paid Hala Lallo Heath for the testing, Wold deposited the money in a bank account he controlled and did not pay the health care provider that actually conducted the testing.

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.