Utah Accountants Accused of $11M COVID Tax Scam

SALT LAKE CITY – A brazen scheme to siphon off over $11 million in COVID-19 relief funds has landed two Utah County men and their accounting business in federal court. Zachary Bassett, 39, of Provo, Mason Warr, 37, of Vineyard, and their firm, COS Accounting & Tax LLC, doing business as 1099 Tax Pros, are accused of a massive tax fraud targeting pandemic-era assistance programs.

According to a federal indictment unsealed Wednesday, the trio allegedly filed more than one thousand fraudulent tax forms with the IRS, claiming in excess of $11 million in false and fraudulent Employee Retention Credit (ERC) and sick and family leave wage credits on behalf of COS Accounting’s clients. The scheme, prosecutors say, ran from at least April 2020 through August 2021, exploiting the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the Families First Coronavirus Response Act (FFCRA).

The CARES Act and FFCRA were designed to keep businesses afloat and employees on the payroll during the height of the pandemic. The Employee Retention Credit offered tax relief, while FFCRA mandated paid sick leave and expanded family leave for COVID-related absences. But the indictment alleges Bassett, Warr, and COS Accounting & Tax LLC twisted these programs into a personal profit center. They stand accused of conspiracy to defraud the United States, wire fraud, and aiding and assisting in filing false tax returns.

“During the pandemic, the defendants allegedly took advantage of a program intended to provide critical relief for businesses impacted by the COVID-19 outbreak,” stated IRS Criminal Investigation Special Agent in Charge Albert Childress. “IRS CI is committed to bringing justice to those who have exploited the pandemic for personal gain and have stolen from America’s taxpayers.” The government has indicated it will seek forfeiture of any assets derived from the alleged scheme if the defendants are convicted.

An initial appearance was scheduled for February 22, 2023, at the U.S. District Court in Salt Lake City. U.S. Attorney Trina A. Higgins for the District of Utah is prosecuting the case, with Assistant U.S. Attorney Jennifer K. Muyskens leading the charge. The IRS-Criminal Investigation is handling the investigation. Anyone suspecting COVID-19 related fraud can report it to the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via their web complaint form: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

UPDATE (May 15, 2024): The defendants in this case, Zachary Bassett, Mason Warr and COS Accounting & Tax LLC, were acquitted of the charges alleged in the indictment described in the press release below.