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IRS Criminal Investigation Recovered Almost $9 Billion in Covid-Related Fraud

S.J. Steinhardt
Published Date:
Apr 2, 2024

As the IRS continues to investigate COVID fraud, four years after the start of the pandemic, its Criminal Investigation division (CI) has recovered $8.9 billion in related cases through February, Accounting Today and CPA Practice Advisor reported.

IRS CI has investigated 1,644 tax and money laundering cases in pandemic relief programs, 795 people, sentencing 373 of them to an average of 34 months in prison, and obtaining a 98.5 percent conviction rate.

“The work by IRS Criminal Investigation provides 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. “Protecting taxpayers against fraud in pandemic-era programs is just one example of the important role that CI plays in the law enforcement community. A healthy budget for the IRS helps us get the job done, and the work of CI provides a critical safety net to protect the nation against fraud.”

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

IRS CI highlighted two recent sentencing, both of which occurred in March.

Rami Saab of Long Island, also known as “Rami Hasan,” was sentenced to 10 years in prison and required to pay $9.6 million in restitution for his role as the mastermind behind a sprawling conspiracy to fraudulently obtain loans amid the COVID-19 pandemic. He and a network of co-conspirators fraudulently applied for more than $32 million in loans from the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Program (EIDL) on behalf of shell corporations they controlled, obtaining $9.6 million in emergency-relief funds intended for distressed small businesses. After laundering the money through 50 dormant bank accounts, they used the money for themselves.

Terrence L. Pounds of Holland, Ohio was sentenced to 94 months in prison and ordered to pay more than $4.2 million to the Small Business Administration (SBA) after being convicted of conspiracy to commit wire fraud and money laundering. Pounds and his co-defendants devised a scheme to obtain millions of dollars in SBA-financed loans from the EIDL Program and the PPP under false pretenses. He used the money to purchase several new vehicles, which were later forfeited to the U.S. government.

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