IRS investigating almost $9B in COVID pandemic fraud

Four years after the start of the COVID-19 pandemic, the Internal Revenue Service’s Criminal Investigation division has investigated 1,644 tax and money laundering cases related to fraud around pandemic relief programs worth potentially $8.9 billion.

As of the end of February, 795 persons had been indicted and 373 sentenced to an average of 34 months in prison. During the last four years, the IRS has obtained a 98.5% conviction rate in prosecuted COVID fraud cases.

“In the last year alone, we have opened nearly 700 new COVID fraud investigations that collectively add up to $5 billion in potential fraud,” added CI chief Guy Ficco. “Our special agents continue to seek out fraudsters who stole money from government loan programs for their personal gain.”

“The work by IRS Criminal Investigation plays a vital role in protecting against fraud and serves a key part in the agency’s wider efforts to ensure fairness in the nation’s tax system,” said IRS Commissioner Danny Werfel in a statement. “A healthy budget for the IRS helps us get the job done.” 

Recent sentencings include:

• Rami Saab, a.k.a. Rami Hasan, of Long Island, New York, has been sentenced to 10 years in prison and ordered to pay $9.6 million in restitution for his role in a conspiracy to fraudulently obtain loans. Saab and his co-conspirators applied for more than $32 million in loans from the Paycheck Protection Program and the Economic Injury Disaster Loan program for shell corporations they controlled. The Small Business Administration and private banks administering the programs granted at least 20 such applications; the conspirators received $9.6 million, which they laundered in more than 50 otherwise dormant bank accounts.
• Terrence L. Pounds, of Holland, Ohio, has been sentenced to 94 months in prison and ordered to pay more than $4.2 million to the SBA after being convicted of conspiracy to commit wire fraud, wire fraud and money laundering. Pounds and his co-defendants schemed to steal loans from the EIDL and PPP programs, often claiming the loans were for nonprofit, faith-based organizations. He obtained millions in loans.

The CI unit is encouraging people with information about known or suspected COVID fraud to contact their local CI field office; contact information for CI field offices is included in the division’s annual report.