Current And Former IRS Employees Charged With Defrauding COVID Relief

The Department of Justice (DOJ) announced Tuesday that five current or former Internal Revenue Service (IRS) employees are charged with planning to defraud COVID relief funds of hundreds of thousands of dollars. The ill-gotten gains were allegedly spent on luxury items and trips.

Officials say the five have individually been charged with wire fraud for obtaining fraudulent loans from the federal Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program. The funds were intended to provide relief to small business owners and individuals.

Loans ranged from $11,000 up to over $170,000.

In a statement, the U.S. Attorney for the Western District of Tennessee, Kevin G. Ritz said that the IRS employees acted out of “pure greed.”

He accused the five of abusing their positions by illegally getting funds that were meant for individuals and businesses during the height of the COVID-19 pandemic who legitimately needed assistance.

One former IRS Program Evaluation and Risk Analyst filed four EIDL applications for loans over $500,000. He was granted $171,000 and allegedly spent some of the relief funds on a Mercedes-Benz. Authorities say he placed the rest of the money in a personal investment account.

He is charged with two counts of wire fraud as well as two others of money laundering.

Another was an IRS contact representative who sought at least $32,500 in loans. Of the $11,500 in funds she received, investigators allege expenditures included luxury clothing, manicures and massages.

A third person charged with wire fraud obtained nearly $30,000 that was allegedly used to fund a trip to Las Vegas and luxury clothing. Another applied for four separate loans and received over $66,000.

These funds allegedly bankrolled a Gucci satchel and other personal goods.

The fifth Memphis-area suspect worked as a Lead Management and Program Assistant in the Human Capital Office. She pled guilty to one count of wire fraud in July for receiving over $123,000 in PPP and EIDL loans.

Investigators said her relief funds went towards multiple trips to Las Vegas as well as jewelry. Each count of wire fraud carries a possible 20-year prison term. The first suspect also faces two possible 10-year sentences for money laundering.

The DOJ said it has prosecuted over 150 defendants in more than 95 criminal cases, recovering over $75 million in cash proceeds intended for COVID assistance.