WILMINGTON, Del. – Carnell Ragan, 59, of Philadelphia, Pennsylvania, is trading city streets for federal prison bars after being sentenced to three years behind bars for orchestrating a brazen scheme to defraud the Internal Revenue Service. U.S. Attorney Julianne E. Murray announced the sentence today, alongside an order for Ragan to fork over $1.6 million in restitution. Chief U.S. District Judge Colm F. Connolly handed down the punishment, signaling a firm stance against pandemic-related fraud.
The scam revolved around the Employee Retention Credit (ERC), a program launched by Congress in 2020 to keep businesses afloat during the COVID-19 pandemic. Initially offering a 50% credit on up to $10,000 in wages, the ERC escalated to a 70% credit per employee, per quarter, by 2021. The catch? Businesses had to prove eligibility by filing IRS Form 941. Ragan exploited this, turning the program into a personal piggy bank.
Court documents reveal Ragan recruited over 20 individuals to participate in his elaborate scheme. These recruits owned businesses that were, in reality, either defunct or had no employees during the pandemic – making them ineligible for ERC funds. Undeterred, Ragan used their business information to submit false Forms 941, requesting a staggering $20 million in fraudulent credits. The IRS, unfortunately, bit, issuing checks totaling over $1.6 million, including over $800,000 to a Delaware-registered business, based on these bogus claims.
“Ragan took advantage of pandemic relief funds that were intended to help those harmed most by the pandemic,” a furious U.S. Attorney Murray stated. “He shamelessly enriched himself and his friends at the expense of the American taxpayer.” Her office, alongside federal law enforcement partners, vows to continue pursuing and prosecuting those who preyed on pandemic relief programs.
Yury Kruty, Special Agent in Charge of the IRS Criminal Investigation Philadelphia Field Office, echoed that sentiment. “Today’s sentencing is a strong reminder that those who find ways to fraudulently benefit from government programs meant to help struggling businesses will be brought to justice,” Kruty said. “Those who line their pockets with profits from these schemes should know they will not go undetected and will be held accountable.”
The case was spearheaded by Assistant U.S. Attorney Jesse S. Wenger, with investigative support from IRS-CI. Details of the case, including court documents, are available on the U.S. Attorney’s Office for the District of Delaware website and through PACER (Case No. 25-CR-0009-CFC). This conviction serves as a stark warning: stealing from pandemic relief won’t pay – it will land you in a federal cell.
RELATED: Philly Carjacking Crew Gets Life for Marine’s Murder
RELATED: Philly Carjacking Crew Gets Life for 2 Murders
Related Federal Cases
- Bankruptcy Bandit: MD Man Gets 90 Months for $1.8M Scam · Washington
- Maryland Man Gets 90 Months for $1.8M Bankruptcy Scam · Washington
- Bay Bandit: Hayden Gets 18 Months for Striped Bass Heist · Maryland
- Zuckerman Gets 70 Months for $45M Tax Scam · Delaware
- Oil Swindle: Harley Gets 12 Years, Appeal Fails · Delaware
Key Facts
- State: Delaware
- Agency: DOJ USAO
- Category: White Collar Crime
- Source: Official Source ↗
🔒 Get the grimiest stories delivered weekly. Subscribe free →
Browse More
MORE FEDERAL CRIME NEWS
White Collar CrimeWhite Collar CrimeWhite Collar CrimeWhite Collar Crime