Three Irvington, New Jersey people have been charged for their participation in a fraudulent scheme that sought over $2.9 billion in refunds from the IRS, according to U.S. Attorney Philip R. Sellinger’s announcement today.
The accusations originate from the filing of 131 fraudulent tax forms, taking advantage of employment tax benefits connected to COVID-19.
The defendants, Rudolph Johnson, Frantz Pasteur, and Frederick Anderson, are charged with conspiring to commit wire and mail fraud as well as conspiring to submit false claims against the government.
In addition, each person was charged with three counts of money laundering, although Pasteur was only charged with two counts.
According to U.S. Attorney Sellinger, Anderson is anticipated to appear at a later time. Johnson and Pasteur have already appeared in court before U.S. Magistrate Judge Michael A. Hammer in Newark federal court and have been released on bond.
Between June 2021 and November 2023, the three perpetrators engaged in fraudulent activities. They created multiple false entities to obtain unjustified tax refunds, including the employee retention tax credit (ERC), which Congress had instituted to lessen the financial impact of the COVID-19 pandemic.
Due to the fact that these organizations had no substantial tax history or W-2 salary payments, they were utilized to fraudulently claim $2.9 billion in tax advantages, which resulted in $1.03 million in refunds from the U.S. Treasury.
The defendants illegally enriched themselves by using the illicitly obtained money to buy expensive goods that they subsequently transferred into personal bank accounts.
Severe penalties are imposed for the alleged offenses: conspiracy to file false claims carries a maximum sentence of 10 years in prison and a fine of $250,000; conspiracy to commit wire and mail fraud carries a maximum sentence of 20 years in prison and a fine of $250,000; and money laundering charges carries a maximum sentence of 10 years in prison and a fine.
This case serves as a reminder of the continued efforts made by law enforcement to combat fraud that takes advantage of government relief measures put in place during the COVID-19 outbreak.
