Kevin J. Gregory, Fraud, California 2023
LOS ANGELES - A Los Angeles-area man pleaded guilty today in federal court to making false claims to the IRS, admitting to seeking more than $65 million in COVID-19-related tax credits for a nonexistent farming business.
Kevin J. Gregory, 57, pleaded guilty to one count of making false claims to the IRS and has been in federal custody since May 2023.
In response to the COVID-19 pandemic and its economic impact, Congress authorized an employee retention tax credit that a small business could use to reduce the employment tax it owed to the IRS, also known as the 'employee retention credit.'
Gregory made false claims to the IRS for the payment of nearly $65.4 million in tax refunds for a purported Beverly Hills-based farming-and-transportation company named Elijah USA Farm Holdings, from November 2020 to April 2022.
The IRS issued a portion of the refunds Gregory claimed, and Gregory used that portion – more than $2.7 million – for personal expenses.
United States District Judge Josephine L. Staton scheduled a May 16 sentencing hearing, at which time Gregory will face a statutory maximum sentence of five years in federal prison.
The IRS Criminal Investigation investigated this matter, and Assistant United States Attorney Valerie L. Makarewicz of the Major Frauds Section is prosecuting this case.
According to his plea agreement, Gregory made a false claim to the IRS for the payment of a tax refund in the amount of $23,877,620, which he submitted as part of Elijah Farm's quarterly federal tax return.
Gregory claimed Elijah Farm employed 33 people, paid nearly $1.6 million in quarterly wages, had deposited nearly $18 million in federal taxes, and was entitled to nearly $6.5 million in COVID-relief tax credits.
In fact, Gregory knew that Elijah Farm employed nobody and paid wages to no one and had not made federal tax deposits to the IRS in the amounts stated on his tax return.
Key Facts
- State: California
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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