The Internal Revenue Service’s Criminal Investigation unit has launched 2,039 tax and money laundering cases related to COVID fraud over the past five years, with attempted fraud in these cases totaling $10 billion.
As of Feb. 28, 1,028 people have been indicted for their alleged COVID-related crimes, and 569 individuals have been sentenced to an average of 31 months in federal prison in the fivce years since passage of the CARES Act. IRS-CI said Wednesday it has obtained a 97.4% conviction rate in prosecuted COVID fraud cases.
The COVID fraud cases included a wide range of criminal activity, including fraudulently obtained loans, credits and payments meant for American workers, families and small businesses.
“It’s been five years since Congress enacted the CARES Act, and our special agents have used their financial acumen to root out thousands of instances of fraud, waste and abuse tied to CARES Act programs,” said IRS-CI Chief Guy Ficco in a statement Wednesday. “In the past year alone, our special agents initiated 380 new investigations into COVID fraud. CARES Act fraudsters have no regard for their fellow Americans. In many cases they stole funds and spent them on luxury items ranging from trips to cars – all while businesses who should have received these funds – were floundering due to unprecedented economic hardship.”
As part of its COVID fraud investigations, IRS-CI has particularly focused on investigating instances of Employee Retention Credit fraud. As of Feb. 28, IRS-CI has initiated 545 investigations, involving more than $5.6 billion in ERC fraud in tax years, 2020, 2021, 2022 and 2023. Seventy-five of the 545 investigations have resulted in federal charges. Thus far, 38 defendants in those cases have been convicted, with 18 defendants sentenced to an average of 21 months in prison. However, that focus may change as President Trump has
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