OAKLAND, CA (MPG) – Five years after the enactment of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, IRS Criminal Investigation (IRS-CI) has launched over 2,000 tax and money laundering cases related to COVID fraud, uncovering approximately $10 billion in attempted fraud. These cases involve a range of criminal activities, including fraudulent loans, credits, and payments meant to support American workers, families, and small businesses during the pandemic.

As of Feb. 28, more than 1,000 defendants have been charged with COVID-related crimes. IRS-CI has achieved a conviction rate exceeding 97%, leading to 569 individuals being sentenced to an average of 31 months in federal prison. Many investigations remain ongoing.

“It’s been five years since Congress enacted the CARES Act, and our special agents have used their financial acumen to root out thousands of instances of fraud, waste and abuse tied to CARES Act programs. In the past year alone, our special agents initiated 380 new investigations into COVID fraud,” said IRS-CI Chief Guy Ficco. “CARES Act fraudsters have no regard for their fellow Americans. In many cases they stole funds and spent them on luxury items ranging from trips to cars – all while businesses who should have received these funds – were floundering due to unprecedented economic hardship.”

A major focus of IRS-CI’s efforts has been investigating Employee Retention Credit (ERC) fraud, a refundable tax credit intended for eligible businesses and tax-exempt organizations impacted by COVID-19. As of Feb. 28, IRS-CI has initiated 545 ERC fraud investigations, involving over $5.6 billion across tax years 2020-2023. Of these cases, 75 have led to federal charges, resulting in 38 convictions and 18 individuals sentenced to an average of 21 months in prison.

Recent IRS-CI Oakland Field Office COVID fraud sentencings include:

Calaveras County man sentenced for COVID-19 paycheck protection program fraud | Internal Revenue Service

In May 2024, Tracy Emery Smith of Valley Springs, California, was sentenced to 37 months in prison and ordered to pay $901,035 in restitution for COVID-19 Paycheck Protection Program (PPP) loan fraud and money laundering. In 2020, Smith submitted loan applications for three companies containing false information such as the number of employees, the average monthly payroll for the company.

San Jose Restaurant Owner Sentenced to Two-And-A-Half Years In Prison In Multi-Million-Dollar Covid-19 Fraud Scheme | United States Department of Justice

In June 2024, a San Jose, California restauranteur who fraudulently obtained and misused millions of dollars in COVID-19 relief funds was sentenced to 30 months in prison. David Tai Leung applied in May 2021 for $5 million in Restaurant Revitalization Fund (RRF) funds that he certified he would use for approved business-related expenses. Leung admitted he received approximately $5.6 million in RRF and Paycheck Protection Program (PPP) funds and that he unlawfully used $3.4 million of those funds. Leung was ordered to pay that amount in restitution

The CARES Act was signed into law on March 27, 2020, to provide emergency financial assistance to millions of Americans suffering from the economic effects of the COVID-19 pandemic.

IRS-CI encourages the public to share information regarding known or suspected fraud tied to the CARES Act by contacting their local IRS-CI field office.

IRS-CI is the law enforcement 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, obtaining a 90% federal conviction rate. The agency has 20 field offices located across the U.S. and 14 attaché posts abroad.