A Palm Springs man has admitted to defrauding both the IRS and COVID-19 relief programs, causing a collective loss of over $3 million. The culprit, 48-year-old William Mandel Musgrow, entered a guilty plea for one count of wire fraud and one count of aiding in the preparation of a false tax return, as reported by the U.S. Attorney's Office for the Central District of California.
As per his plea agreement, Musgrow utilized his own business entities to generate fake W-2 forms, these fraudulent documents were then used by individuals to file tax returns they weren't entitled to, bilking the IRS out of over $2 million. Furthermore, between March and August 2020, Musgrow submitted numerous falsified applications for pandemic-related economic assistance, inflating employee counts and misrepresenting his businesses' operations to unjustly obtain close to $1 million in funds.
Renowned in the fraud scheme world, Musgrow's actions encompassed at least 87 fraudulent tax returns, based on the false W-2s he issued, leading to the IRS wrongfully doling out approximately $2.1 million in refunds. The COVID-19 relief fraud he perpetrated involved 14 deceptive loan applications that sought a cumulative amount of more than $1.9 million.
The court has slotted a sentencing hearing for January 16, 2025, where Musgrow faces up to 20 years for the wire fraud count, and three years for tax fraud, Judge Kenly Kiya Kato presiding over the judgment. The case is the product of an investigation by IRS Criminal Investigation and, will be prosecuted by Assistant United States Attorney Benjamin J. Weir of the Riverside Branch Office.
In response to frauds like Musgrow's, the Justice Department established the COVID-19 Fraud Enforcement Task Force in May 2021. The task force works to combat pandemic-related fraud by enhancing coordination across agencies and improving investigation and prosecution efforts. The public can assist by reporting any suspected fraudulent activity related to COVID-19 relief efforts to the Civil Division's Fraud Section, via their website or by contacting the Justice Department's National Center for Disaster Fraud Hotline.
