IRS-CI releases latest COVID-related fraud investigational statistics

 

Agency has conducted more than 660 investigations with alleged fraud totaling more than $1.8B

Date: March 23, 2022

Contact: newsroom@ci.irs.gov

WASHINGTON — IRS Criminal Investigation (IRS-CI) released investigational statistics today about COVID-related fraud investigations conducted by the agency over the past two years.

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 (CARES) Act was signed into law nearly two years ago as a safety net for Americans in light of an unprecedented health crisis. 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," said IRS-CI Chief Jim Lee.

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

Case examples include:

  • San Fernando Valley family members sentenced to years in prison for fraudulently obtaining tens of millions of dollars in COVID relief

    The Ayvazyan family received sentences ranging from 17.5 years in prison to 10 months of probation for crimes ranging from bank and wire fraud to aggravated identity theft. The family used stolen and fictitious identities to submit 150 fraudulent applications for COVID-relief funds based on phony payroll records and tax documents to the Small Business Administration, and then used the funds they received to purchase luxury homes, gold coins, jewelry designer handbags and more. Richard Ayvazyan and his wife Terabelian cut their ankle monitoring devices and absconded prior to their sentencing hearing. They were arrested in Europe in February 2022 and are awaiting extradition back to the U.S.
     
  • Two Florida residents sentenced to prison for COVID-19 relief fraud

    Florida residents Keyaira Bostic and Luke Pierre Jr. were sentenced to 44 months and two years in prison for wire fraud, respectively. They submitted false documentation about their companies, including number of employees and average payroll, to fraudulently secure loans from the Paycheck Protection Program (PPP) under the CARES Act.

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 Paycheck Protection Program 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.