Three individuals from New Jersey are facing charges for allegedly attempting to fraudulently obtain over $2.9 billion from the IRS. Their scheme involved filing more than 130 false tax forms, claiming COVID-related employment tax credits.
Three individuals from Irvington, Essex County, namely Rudolph Johnson, Frantz Pasteur, and Frederick Anderson, have been charged by federal authorities. They each face one count of conspiracy to file false claims against the government and one count of conspiracy to commit wire and mail fraud.
Johnson faces charges for three counts of money laundering, while Pasteur is charged with two counts of money laundering. Anderson, on the other hand, is facing three counts of money laundering.
During the COVID-19 pandemic and the resulting economic downturn, Congress enacted the employee retention tax credit (ERC) to assist small businesses in reducing their employment tax liabilities to the IRS.
Officials have revealed that between June 2021 and November 2023, the group formed multiple fake entities and submitted false IRS forms on behalf of these entities, falsely asserting their eligibility for tax refunds, including the ERC. These entities purportedly had little to no tax records, never paid any W-2 wages, and made minimal, if any, payments to the IRS.
In total, the defendants claimed $2.9 billion in tax benefits, and as a result, the U.S. Treasury issued $1.03 billion in refunds.
Johnson and Pasteur made their appearance in Newark federal court on Thursday, where they were granted bail. Anderson, on the other hand, is expected to make his appearance at a later date.
Conspiring to file false claims against the government is punishable by up to 10 years in prison and a fine of $250,000. If someone conspires to commit wire and mail fraud, they can face up to 20 years in prison. Additionally, each money laundering offense can result in a maximum penalty of 10 years in prison and a fine of $250,000.
It is important to remember that charges are merely accusations, and every individual is presumed innocent until proven guilty in a court of law.
