California Man Arrested in Alleged $52 Million COVID-19 Tax Credit Fraud Scheme

U.S. Attorney Brian D. Miller for the Middle District of Pennsylvania announced the arrest of a California man, Christopher Slater, who is accused of orchestrating a multi-state conspiracy that defrauded the United States of over $52.7 million through fraudulent COVID-19 tax credits. The indictment alleges that Slater, along with co-conspirators, filed hundreds of false tax returns claiming Paid Sick and Family Leave Credit (SFLC) and Employee Retention Credit (ERC) benefits, funds intended to support businesses and employees during the pandemic.

The scheme, as detailed in the indictment, involved recruiting business owners and utilizing their information to submit fabricated tax returns for these pandemic relief programs. The IRS ultimately disbursed more than 32.2 million of the requested 52.7 million. Slater is facing charges of conspiracy, mail fraud, and money laundering for his alleged role in the elaborate scheme.

A second individual, Mark Keagel of York, Pennsylvania, has also been charged in connection with the conspiracy. Keagel, who owned two businesses that are now defunct, is accused of providing his business information to one of Slater’s associates. The indictment states that false tax returns were filed using Keagel’s business details, resulting in approximately $3.6 million in fraudulent Treasury checks being mailed to him. Keagel is facing charges of money laundering, conspiracy, and theft of government property for allegedly laundering these funds.

The alleged fraud targeted programs established by Congress to provide crucial financial assistance. The SFLC was designed to reimburse businesses for wages paid to employees who were unable to work due to illness or family obligations related to COVID-19. The ERC was intended to incentivize businesses to retain their employees on payrolls during the unprecedented economic disruption caused by the pandemic. The Justice Department has emphasized its commitment to prosecuting individuals who exploit such vital relief programs.

If convicted, Slater faces a maximum of 20 years in prison for each of the mail fraud and conspiracy counts. Both Slater and Keagel could receive up to 10 years in prison for each money laundering and conspiracy charge. Keagel also faces a potential sentence of up to ten years for each count of theft of government property. The investigation into this case is being conducted by IRS Criminal Investigation, with Assistant Deputy Chief Ezra Spiro of the Criminal Division’s Tax Section and Assistant U.S. Attorney Ravi Romel Sharma of the Middle District of Pennsylvania prosecuting the case. It is important to note that an indictment is an accusation, and all defendants are presumed innocent until proven guilty in a court of law. The Justice Department has recently established a National Fraud Enforcement Division, underscoring its focus on investigating and prosecuting fraud against the American public.

Article by Mel Anara, based upon information from the U.S. Attorney’s Office, Middle District of Pennsylvania

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