Wheatland man pleads guilty to submitting false claims against the United States in relation to COVID-19 fraud scheme


Date: May 13, 2024

Contact: newsroom@ci.irs.gov

Sacramento, CA — Jason Toland of Wheatland, pleaded guilty today to one count of submitting false claims against the United States related to COVID-19 pandemic tax credits, U.S. Attorney Phillip A. Talbert announced.

According to court documents, Toland attempted to obtain a total of over $13.4 million in COVID-19 pandemic relief, including by filing multiple false tax returns with the IRS seeking refunds for the Employee Retention Credit and the COVID Sick and Family Leave Credit. Toland used shell companies that had no real employees and no actual business activity to seek over $11 million in such tax refunds to which he was not entitled. In addition, between 2020 and 2023 Toland used the shell companies to fraudulently obtain a total of over $1.7 million in Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) funds. All these tax credits and programs were intended to alleviate the economic harm caused by the COVID-19 pandemic on real businesses with real employees and operating expenses.

To pursue the funds, Toland submitted multiple: (1) Tax forms 941 and 941-X seeking Employee Retention Credit and COVID Sick and Family Leave Credit refunds from the IRS; (2) PPP loan applications to various banks; and (3) EIDL applications to the Small Business Administration (SBA) – all on behalf of the phony shell companies. In one specific instance, on Nov. 18, 2022, Toland filed two false Forms 941 (which are Employer’s Quarterly Federal Tax Returns) to the IRS that resulted in improper refunds in the amount of $210,868.14 being paid out to Toland.

Of the over $13.4 million that he sought through false tax returns and fraudulent loan applications, Toland successfully obtained over $1.95 million. All the funds Toland received went to his own personal enrichment. As a part of his plea agreement, Toland has agreed to pay $1,952,504.14 in restitution, plus interest and fees, to the IRS and SBA.

“Tax credits are another face of pandemic fraud, and our COVID-19 Fraud Strike Force will continue to pursue those who abuse them,” said U.S. Attorney Talbert. “Defendant’s false claims targeted credits meant for real businesses suffering real consequences of the pandemic. The U.S. Attorney’s Office remains committed to working with our law enforcement partners to identify and prosecute those who provide false information to seek these credits.”

“Mr. Toland’s plea reinforces a simple message. Crime does not pay,” said IRS Criminal Investigation Oakland Field Office Acting Special Agent in Charge Michael Mosley. “Our highly trained agents are experts at investigating financial crimes and following the money directly to criminals pursing ill-gotten gains. Our agents are also motivated to protect the American people against fraudsters siphoning money from citizens in need.”

This case is the product of an investigation by IRS Criminal Investigation (CI) Oakland Field Office in collaboration with the CI Nationally Coordinated Investigation Unit. IRS CI received significant assistance from the SBA Office of Inspector General and Federal Bureau of Investigation. Assistant United States Attorney Denise N. Yasinow is prosecuting the case.

Toland is scheduled to be sentenced by U.S. District Dale A. Drozd on October 8, 2024. He faces a maximum statutory penalty of 5 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

This effort is part of a California COVID-19 Fraud Enforcement Strike Force operation, one of five interagency COVID-19 fraud strike force teams established by the U.S. Department of Justice. The California Strike Force combines law enforcement and prosecutorial resources in the Eastern and Central Districts of California and focuses on large-scale, multistate pandemic relief fraud perpetrated by criminal organizations and transnational actors. The strike forces use prosecutor-led and data analyst-driven teams to identify and bring to justice those who stole pandemic relief funds.

CI is the criminal investigative 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. CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.