Epoch Health7 Charged in America’s Biggest COVID Tax Credit Fraud Scheme

The Department of Justice has uncovered what it describes as America’s largest COVID-19 tax credit fraud scheme, charging seven individuals with attempting to defraud the government of more than $600 million through falsified employment tax credit claims. The defendants allegedly exploited the Employee Retention Credit (ERC) and Sick and Family Leave Credit (SFLC) programs by filing more than 8,000 false tax returns between November 2021 and June 2023.

Key Points:

• The scheme targeted two major COVID-19 relief programs: the Employee Retention Credit, which incentivized businesses to maintain employee payroll, and the Sick and Family Leave Credit, which reimbursed businesses supporting employees unable to work due to COVID-19.
• The defendants allegedly operated through Credit Reset, a purported credit repair business, utilizing VPNs to obscure IP addresses and creating shell companies for clients without legitimate businesses to facilitate fraudulent claims.
• Of the $600 million in fraudulent claims filed, the IRS disbursed approximately $45 million before detecting the scheme. The DOJ has charged the defendants with 45 criminal counts, including wire fraud and conspiracy to defraud the United States.
• The IRS Criminal Investigation unit has investigated 1,644 tax and money laundering cases linked to COVID fraud, totaling $8.9 billion, with 700 new investigations opened in the past year representing $5 billion in potential fraud.
• The Special Inspector General for Pandemic Recovery (SIGPR) is scheduled to expire in March 2025, prompting new legislation to extend its authorization through 2030 to continue pursuing pandemic fund recovery.

“While we are $36 trillion in debt, we especially cannot afford to leave more than $200 billion floating around, especially in the hands of fraudsters.”
— Sen. Joni Ernst (R-Iowa)

Medical Fraud Summaries