Two Georgia men have admitted they tried to turn New York’s film tax credits into their own personal payday, pleading guilty in a federal case that prosecutors say leaned on online tax software and fake returns to squeeze the state for more than $550,000.
According to prosecutors, the scheme included at least one bogus refund worth $49,772. The defendants, 28-year-old Ryan Rugg and 37-year-old Joshua Jordan, both of Tifton, Georgia, pleaded guilty this week in connection with the conspiracy, which was first flagged by New York tax investigators in mid-2023.
As detailed by the U.S. Attorney’s Office for the Middle District of Georgia, Rugg pleaded guilty on July 22 to one count of conspiracy to commit wire fraud. He faces a statutory maximum of 30 years in prison, five years of supervised release and a $250,000 fine, with sentencing set for Oct. 29 in Albany.
Jordan pleaded guilty earlier, on March 26, to one count of conspiracy to commit wire fraud and one count of aggravated identity theft. Prosecutors say he faces up to 30 years in prison on the wire fraud charge, plus a mandatory consecutive two years on the identity theft count. His sentencing is scheduled for Sept. 3 in Albany.
How prosecutors say the scheme worked
Investigators say Jordan opened an account with Online Taxes in February 2023 and, working with Rugg, used it to fire off 22 New York State income tax returns that claimed film production and post-production credits for people who had never worked a day in New York’s film industry.
The U.S. Attorney’s Office for the Middle District of Georgia says one fraudulent return filed on April 18, 2023, for a victim identified as S.B. resulted in a $49,772 refund. Jordan then called the New York State Department of Taxation and Finance pretending to be S.B. and asked for details about the filing, according to prosecutors.
Investigation and enforcement
A New York State Department of Taxation and Finance investigator began flagging the suspicious filings on June 24, 2023, after noticing patterns in the returns, prosecutors said. The FBI’s Atlanta Valdosta Resident Agency joined the probe as the scope of the alleged fraud came into focus.
The Justice Department credited New York tax investigators and the FBI with untangling the scheme. Assistant U.S. Attorney Monica Daniels is handling the prosecution.
Why this matters for New York's film credits
New York’s film production and post-production tax credits are designed to lure jobs and spending into the state by helping cover qualifying in-state production costs. Those credits can add up fast, which is exactly why programs like this are a magnet for fraudsters.
Per guidance from the New York State Department of Taxation and Finance, the production credit can reach a substantial share of eligible expenses, and lawmakers have expanded the program’s allocations in recent years. Prosecutors say that growth makes fraudulent claims particularly costly.
State tax officials have warned that scams like this drain money from legitimate productions and chip away at public trust in the tax system, a concern also reflected in reporting from WSB-TV.
Sentencing and penalties
Both men now wait to learn how much time they will actually serve. Each faces the possibility of lengthy federal prison terms and significant fines if judges opt for the maximum penalties, and federal law requires that any sentence for aggravated identity theft run consecutively to other time.
Sentencing for both defendants will take place in U.S. District Court in Albany before Judge W. Louis Sands, with Jordan due in court on Sept. 3 and Rugg on Oct. 29. Prosecutors say the conspiracy attempted to obtain, or did obtain, more than $550,000 in refunds.
Local coverage has noted that the case comes on the heels of the Justice Department’s creation of a National Fraud Enforcement Division this spring, an effort aimed at cracking down on schemes that exploit refundable tax credits. For two Tifton defendants, federal agents say, the curtain has already come down on their short-lived tax credit caper.
