SALT LAKE CITY, Utah, Feb. 4, 2023 (Gephardt Daily) — Two Utah County men and an accounting firm have been charged with running a scheme to defraud the federal government of millions of dollars in Covid-19 relief assistance funds.
The scheme to defraud took place from April 2020 through August 2021, possibly longer, and involved more than $11 million in phony claims for pandemic relief, according to a Friday press release issued by U.S. Attorney for Utah Trina A. Higgins.
Zachary Bassett, 39, of Provo, Mason Warr, 37, of Vineyard, and COS Accounting & Tax LLC, doing business as 1099 Tax Pros located in Provo, participated in a fraudulent tax scheme to seek COVID-related relief funds via more than a thousand fraudulent tax forms, according to the charges.
Court filings say they claimed “in excess of $11 million in false and fraudulent Employee Retention Credit (ERC) and sick and family leave wage credits for clients of COS Accounting.”
In explaining the congressional acts the defendants are accused of scamming, the release said the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), enacted in March 2020, provides an employee retention tax credit (ERC) and is designed to encourage businesses to keep employees on their payroll.
The Families First Coronavirus Response Act (FFCRA) requires certain employers to provide employees with paid sick leave of up to 80 hours and expanded family and medical leave of up to 10 weeks for specified reasons related to COVID-19. FFCRA provides refundable tax credits that reimburse employers for the cost of providing paid sick and family leave wages related to COVID-19.
The release does not say how much of the pandemic relief money fraudulently claimed actually flowed to the defendants. But it does point out defendants have been alerted that any property believed purchased from the proceeds of the fraud would be seized.
“During the pandemic, the defendants allegedly took advantage of a program intended to provide critical relief for businesses impacted by the COVID-19 outbreak,” said 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 indictment issued by a grand jury Wednesday charges Bassett, Warr and the accounting firm with conspiracy to defraud the United States, wire fraud and aiding and assisting in filing false tax returns.
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