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Published on January 19, 2025
Los Angeles Man Pleads Guilty to Making False $65 Million COVID-19 Tax Credit ClaimsSource: Unsplash/Carles Rabada

A Los Angeles-area man, Kevin J. Gregory, age 57, entered a guilty plea on charges of making fraudulent claims to the IRS, admitting to a scheme where he sought over $65 million in COVID-19-related tax credits for a business that didn’t exist. Gregory, who has been in federal custody since May 2023, pleaded guilty to one count of making false claims, as per the U.S. Attorney’s Office for the Central District of California.

During the height of the pandemic, Congress authorized tax credits to support businesses that retained employees through economic disruptions, Kevin J. Gregory filed claims for a bogus Beverly Hills-based farming-and-transportation company, Elijah USA Farm Holdings. According to details in his plea agreement, Gregory's fraudulent activities spanned from November 2020 to April 2022, despite the purported company employing no one.

In a particularly bold move, Gregory placed a false claim for a tax refund of $23,877,620 with the IRS in January 2022. His quarterly federal tax return for the non-operational Elijah Farm stated it paid out nearly $1.6 million in wages to 33 employees and made almost $18 million in federal tax deposits, therefore claiming entitlement to nearly $6.5 million in COVID-relief tax credits, as detailed by the U.S. Attorney's Office, Central District of California. These statements were, however, baseless as the company had no employees and made no such tax deposits.

As a result of his fraudulent claims, Gregory received over $2.7 million which he then used for personal expenses. United States District Judge Josephine L. Staton has scheduled a sentencing hearing for May 16, where Gregory could face up to five years in federal prison, as reported by the U.S. Attorney's Office, Central District of California. The case was probed by IRS Criminal Investigation and is being prosecuted by Assistant United States Attorney Valerie L. Makarewicz of the Major Frauds Section.