4 Charged in Largest-Ever COVID Tax Credit Fraud Scheme

The suspects allegedly filed fake forms for at least 148 companies and defrauded the government of about $93 million.

The Federal Bureau of Investigation (FBI) headquarters in Washington on Nov. 6, 2023. Madalina Vasiliu/The Epoch Times

Four Californians were charged by a federal grand jury on June 11 for their alleged involvement in a $93 million COVID-19 tax credit fraud scheme, deemed to be the “largest ever identified,” the FBI said in a June 26 statement.

The individuals are Kristerpher Turner, 52, of Harbor City; Toriano Knox, 55, of Los Angeles; Kenya Jones, 46, of Compton; and Joyce Johnson, 55, of Victorville.

The fraud is related to a COVID-19 tax credit program authorized by Congress called the Families First Coronavirus Response Act (FFCRA). The program required certain employers to provide workers with paid sick leave or expanded family and medical leave for reasons related to the pandemic. Employers would then be reimbursed in the form of tax credits.

In the fraud scheme, Turner and his co-conspirators allegedly submitted fraudulent forms under certain companies, including bogus ones, claiming FFCRA tax credits. These companies did not pay for sick or family leave to any employees at any time, the FBI said.

The defendants submitted fraudulent filings not only on behalf of their own purported businesses but also for companies under the name of other people—including romantic partners, family members, and friends—who were recruited into the scam, it added.

For each fraudulent client that received checks from the Treasury under the scheme, Turner reportedly charged somewhere between 20 to 40 percent of the receipts.

“In total, from approximately June 2020 and December 2024, the defendants and their co-conspirators submitted and caused the submission of fraudulent forms for at least 148 companies, seeking a total of approximately $247,956,938 in tax refunds to which they were not entitled,” the FBI said.

“In reliance on the fraudulent forms and the false statements, the IRS issued Treasury checks in the total amount of at least approximately $93 million.”

When defendants learned that the IRS was inquiring about the scheme, Knox, Jones, and other individuals attempted to murder Turner on or about Aug. 29, 2023, to prevent him from speaking to law enforcement, the FBI said. Turner was shot multiple times but survived and is now paralyzed.

All four defendants were charged with mail fraud, conspiracy to commit mail fraud, and conspiracy to submit false claims. Knox and Jones are charged with attempting to kill a witness and using a firearm in furtherance of that crime.

Each mail fraud charge carries a maximum prison term of 20 years. The attempted murder charge is punishable with a 30-year jail term, while the firearm charge can result in life imprisonment.

The Epoch Times was unable to reach the legal representatives of the four defendants.

Another case of a major COVID-19 tax credit fraud came to light earlier this year when seven people were charged with allegedly stealing millions of dollars.

On Jan. 22, the Department of Justice said the individuals were charged with “operating a multi-state conspiracy in which they attempted to defraud the United States of more than $600 million by filing more than 8,000 false tax returns claiming COVID-19-related employment tax credits.”

While the fraudsters filed for $600 million in tax credits, the IRS reportedly ended up disbursing $45 million.

Tackling Pandemic Fraud

On June 26, the Pandemic Response Accountability Committee (PRAC) announced the release of its semiannual report. PRAC was set up under the CARES Act for independent oversight of funds provided under the Act, as well as other related spending bills.

Between Oct. 1, 2024, and March 31, PRAC provided investigative support to over 49 law enforcement partners in more than 1,100 investigations related to the pandemic with a potential fraud loss of $2.4 billion.

“The PRAC’s data analytics tool has helped recover for the taxpayers hundreds of millions of dollars—far more than our total appropriation from Congress,” said Michael E. Horowitz, chair of the committee.

“Now, with three months remaining until our sunset, we urge Congress to maintain our data analytics center to assist agencies and the oversight community in fraud prevention.”

In an April 9 report, the Government Accountability Office said that the true scale of the fraud involved in the pandemic relief funds “will never be known with certainty.”

“The scope of the pandemic-relief response; the inherently deceptive nature of fraudulent activities; and the resources needed for detection, investigation, and prosecution of fraud make it difficult to measure. However, estimates indicate hundreds of billions of dollars in potentially fraudulent payments were disbursed,” the report said.

Between March 2020 and December 2024, the Justice Department secured more than 650 settlements and judgments worth more than $500 million to resolve fraud and overpayment allegations in connection with the pandemic relief programs, it said.

By the end of last year, the Justice Department had announced fraud-related charges against more than 3,000 defendants, of whom 2,148 were sentenced, according to the report.