Los Angeles man sentenced for using Montana shell companies in COVID relief fraud

Date: Oct. 20, 2026

Contact: newsroom@ci.irs.gov

LOS ANGELES – Lamont McCarthy of Los Angeles was sentenced to 63 months in federal prison for orchestrating a multi‑million‑dollar fraud scheme that used Montana‑registered shell companies to obtain pandemic relief funds intended for legitimate small businesses.

McCarthy, who pleaded guilty in July to one count of wire fraud, was also ordered to pay $1,927,935 in restitution and serve three years of supervised release.

According to court documents filed in the Central District of California, McCarthy purchased and controlled shell corporations listed as Cal Construction and India Towing that existed only on paper and conducted no legitimate business operations. He then used these companies to submit fraudulent Paycheck Protection Program (PPP) loan applications, falsely claiming they had substantial revenue, active operations, 15 employees, and significant payroll expenses, even though neither company had any employees nor generated any income.

Once approved, more than $1.9 million in PPP funds were wired to accounts McCarthy controlled. Instead of using the money for payroll or other authorized business expenses, McCarthy diverted the funds for his personal use.

“While Montana business owners and families were struggling during the COVID pandemic, McCarthy was scheming to defraud the government relief programs for personal gain,” said Scott Brown, Acting Special Agent in Charge, IRS CI Phoenix Field Office. “This case demonstrates IRS CI’s ongoing commitment to pursuing individuals who abused these pandemic relief programs and ensuring they are held accountable.”

United States District Judge Percy Anderson presided over the sentencing while Assistant United States Attorney Monica Tait handled the prosecution.

IRS Criminal Investigation and the Small Business Administration conducted the investigation.

On April 7, the Department of Justice announced the creation of the Fraud Division. The Fraud Division is laser-focused on investigating and prosecuting those who commit fraud against the American people. The department’s work to combat fraud supports President Trump’s Task Force to Eliminate Fraud, a whole-of-government effort chaired by Vice President J.D. Vance to eliminate fraud, waste, and abuse within federal benefit programs.

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. It is the only federal law enforcement agency with investigative jurisdiction over violations of the Internal Revenue Code. IRS-CI has 16 field offices located across the U.S. and maintains an international presence through attaché posts abroad.