Three individuals from New Jersey have been accused of fraudulently attempting to obtain over $2.9 billion from the IRS. Astonishingly, they filed more than 130 false tax forms, claiming employment tax credits related to COVID-19.
Three individuals from Irvington, Essex County, namely Rudolph Johnson, Frantz Pasteur, and Frederick Anderson, have been charged by federal authorities. They are accused of conspiring to file false claims against the government and engaging in a conspiracy to commit wire and mail fraud.
Johnson has been charged with three counts of money laundering, Pasteur is facing two counts of money laundering, and Anderson is also facing three counts of money laundering.
Congress has taken action to address the consequences of the COVID-19 pandemic and the resulting economic downturn. As part of this effort, they have authorized an employee retention tax credit (ERC) that provides relief for small businesses. This tax credit allows eligible businesses to reduce the amount of employment tax they owe to the IRS.
Officials have revealed that between June 2021 and November 2023, the group formed multiple fake entities and submitted deceitful IRS forms in the names of these entities, falsely asserting their eligibility for tax refunds, including the ERC. These entities reportedly had minimal tax records, never issued any W-2 wages, and made only insignificant or no 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.
They used that money to purchase luxury cars and fraudulently enriched themselves in the process.
Johnson and Pasteur made an appearance in Newark federal court on Thursday and were subsequently released on bail. Anderson, on the other hand, is scheduled to appear at a later date.
Conspiring to file false claims against the government is a serious offense that can result in a prison sentence of up to ten years and a fine of $250,000. Similarly, conspiracy to commit wire and mail fraud can lead to a maximum of twenty years in prison. Moreover, each money laundering offense carries a potential punishment of ten 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.
