The IRS: CI top ten list spotlights high-end tax crime and illustrates how IRS investigators spend their time. Coming in at number nine on the annual list is a man who combined filing false income tax returns with drug trafficking.
The COVID pandemic had far-reaching impacts on lives around the world. In addition to the devastating contagion, the pandemic upended livelihoods, education, and the economy in ways we do not yet understand. For some, the time was ripe to take advantage of COVID relief programs that were rapidly rolled out in the U.S. One of those was 36-year-old Edward Kim, a Los Angeles man, who initiated and ran a complex fraud and grow operation from 2020 to 2021.
Even before the pandemic, Mr. Kim was involved in the drug trade, shipping drugs from LA to Hawaii. In one instance, law enforcement intercepted delivery of the drugs in Hawaii, making one arrest, and picking up a pound of methamphetamine along with 300 pills packaged as oxycodone but containing lethal fentanyl instead.
By March of 2020, Mr. Kim was situated in a rented warehouse in La Habra where he grew marijuana and maintained an operation for narcotics manufacture and distribution. During this time, Mr. Kim and his crew began filing fraudulent tax returns using personal identifiable information (PII) stolen from others—including California state prison inmates.
Between 2020 and 2021, Mr. Kim and his group submitted false claims to the California Employment Development Department (EDD) stating the filers were unemployed due to the pandemic. Mr. Kim used a variety of his old, new, and other addresses to receive debit cards in payment of unemployment insurance. According to the IRS, the crew received $5,458,050 in fraudulently obtained funds.
At the same time, Mr. Kim and his associates filed false income tax returns which included fraudulent information to gain additional COVID relief in the form of Economic Impact Payments (EIP). Altogether, approximately 300 fake tax returns were filed claiming more than $350,000 in illegitimate COVID relief payments.
Since that time, the IRS has taken a hardline against individuals and crews who scammed COVID relief programs. During a March 2021 traffic stop, law enforcement found meth, a digital scale, and 16 debit cards in the names of other people in the car driven by Mr. Kim. A search of Mr. Kim’s apartment located more meth, EDD documentation, and ATM receipts. Mr. Kim was arrested and remained so until his sentencing.
In March 2023, Mr. Kim was sentenced to 24 years in prison and ordered to pay $5,458,050 in restitution.
If you are involved in tax fraud or have concerns that money you received from COVID relief programs was fraudulent or incorrect—speak with a seasoned criminal tax attorney before you hear from the IRS.
Speak with our tax attorneys if you are involved in tax fraud or have concerns your COVID relief funds were fraudulent
The legal team at Robert J. Fedor, Esq., LLC delivers strong representation to clients locally and abroad. If you have concerns about criminal tax allegations, payroll tax issues, or compliance questions, call 800-579-0997 or contact us online today.
