Following an Internal Revenue Service Criminal Investigation (IRS-CI), Federal Bureau of Investigation and IRS-CI agents arrested four defendants, all California residents. The IRS has been investigating COVID relief tax credit fraud for several years. Many business owners mistakenly—but often intentionally—filed for the Employee Retention Credit and other tax credits when they were not eligible. Last year, approximately $1 billion in fraudulent tax credit claims were denied or clawed back by the IRS.
Kristerpher Turner of Harbor City operated the scam, which involved his crew members submitting false tax credit forms on behalf of employees of businesses—many of which did not exist. By recruiting family and friends to provide their personal information, the network grew along with the number of fraudulent applications for relief. Refunds from the U.S. Treasury were directed to bogus business accounts set up at different banks.
While the fraudsters filing the claims received the Treasury checks, Turner demanded a percentage of each check, between 20% and 40%, through cash, kickbacks or payments to his associates. Between June 2020 and December 2024, false applications for tax credit refunds were filed on behalf of 148 companies, for a total of $247.9 million in fraudulent refunds. Of those, the IRS paid approximately $93 million.
The co-conspirators of Turner learned that the IRS and law enforcement were seeking information on the operation. As a result, several of the defendants decided to kill Turner to ensure he did not talk to the investigators. Proving there is no honor among thieves, Turner was gunned down in broad daylight at an office park, where he suffered nonfatal injuries but was paralyzed as a result.
The defendants were charged with mail fraud, conspiracy to commit mail fraud and conspiracy to submit false claims. The mail fraud charges carry a maximum sentence of 20 years in prison. Two of the crew face firearm charges and attempted murder, which could result in life in prison, among other sentencing.
As is clear in this case, the IRS continues to pursue allegations of federal tax crimes involving those who scammed COVID tax credit programs in both big and small ways. If you are concerned that you received a tax credit check from the government when you were not eligible, or you know that you scammed the government, speak with a knowledgeable tax attorney for solid legal advice.
If you are involved in tax evasion or tax fraud, seek skilled legal representation. If you have filed questionable tax documents or failed to file required reports, speak with a criminal tax attorney for straightforward information and options. Call us at 440-250-9709 or contact us to set up a consultation. We serve domestic and international clients from offices in Cleveland and Chicago.
Not sure what to expect if you are already under scrutiny? Download our free ebook, Understanding Tax Fraud, for insights into warning signs and potential legal defenses.