Roy L. Layne, an Arizona resident, pleaded guilty yesterday to wire fraud and filing a false refund claim with the Internal Revenue Service (IRS). Layne admitted to fraudulently obtaining over $850,000 from the IRS and the U.S. Small Business Administration (SBA) through various COVID-19 relief programs.
According to court documents and statements made in court, Layne engaged in fraudulent activities in 2020 and 2021 by submitting false applications on behalf of several fictitious businesses to secure loans from the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program. These federal programs were established to provide financial assistance to Americans affected by the economic impact of the COVID-19 pandemic.
Layne falsely claimed that his bogus businesses employed dozens of individuals and generated hundreds of thousands of dollars in gross receipts. To support these fraudulent claims and create the appearance of legitimate business operations, Layne fabricated business and employment tax forms, which he filed with the IRS and submitted to the SBA. As a result, Layne received more than $300,000 in loans for which he was not eligible.
In addition to his fraudulent loan applications, Layne filed false tax returns with the IRS in 2022, seeking nearly $7.5 million in refunds. The IRS paid approximately $550,000 in response to these fraudulent refund claims.
Layne is scheduled to be sentenced on February 3, 2025. He faces a maximum penalty of 30 years in prison for each wire fraud charge and five years for the false claim charge. In addition to imprisonment, Layne could face a period of supervised release, restitution, and monetary penalties. A federal district court judge will determine the final sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The announcement of Layne’s guilty plea was made by Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Gary M. Restaino for the District of Arizona.
The investigation into Layne’s activities was conducted by IRS Criminal Investigations and the FBI. The case is being prosecuted by Trial Attorney Matthew R. Hoffman of the Justice Department’s Tax Division and Assistant U.S. Attorney Mary Sue Feldmeier for the District of Arizona.
This article, “Arizona Man Pleads Guilty to COVID-19 Relief Fraud and Filing False IRS Claim” was first published on Small Business Trends