January 20, 2025 – LOS ANGELES, CA – A Los Angeles-area man pled guilty on Friday, January 17 to a federal felony charge and admitted to seeking more than $65 million from the IRS by falsely claiming on tax returns that his
nonexistent farming business was entitled to COVID-19-related tax credits.
Kevin J. Gregory, 57, pleaded guilty to one count of making false claims to the IRS. Gregory has been in federal custody since May 2023.
In response to the COVID-19 pandemic and its economic impact, Congress authorized an employee retention tax credit that a small business could use to reduce the employment tax it owed to the IRS, also known as the “employee retention credit.”
To qualify, the business had to have been in operation in 2020 and to have experienced at least a partial suspension of its operations because of a government order related to COVID-19 (for example, an order limiting commerce, group meetings or travel) or a significant decline in profits. The credit was an amount equal to a set percentage of the wages that the business paid to its employees during the relevant time period, subject to a maximum amount.
Congress also authorized the IRS to give a credit against employment taxes to reimburse businesses for the wages paid to employees who were on sick or family leave and could not work because of COVID-19. This “paid sick and family leave credit” was equal to the wages the business paid the employees during the sick or family leave,...
In 2024, the government and whistleblowers were party to 558 settlements and judgments collecting over $2.9 billion. The government continued its effort to combat cybersecurity threats through its...