A former revenue officer with the IRS and a tax enforcement officer for Oakland have been charged in a $3 million PPP scheme, per the U.S. Attorney’s Office Northern District of California.
Five defendants were included in the lawsuit, including Frank Mosley. He is accused of assisting or abetting a fraudulent tax return and conspiring to commit bank fraud.
Payroll Expenses In PPP Loan Applications
Authorities charged the two men with recruiting longtime friends and now co-defendants Marcus Wilborn, Aaron Boren, and Scott Conway as part of the alleged loan scheme. According to court filings, the Mosleys assisted the men in preparing false loan applications and received kickbacks in exchange.
In a statement made by the prosecution, the defendants admitted that they devised a scheme and artifice to defraud through which they acquired approximately $3 million as a consequence of bogus PPP-loan applications made on behalf of FTI and three other Northern California businesses.
In their PPP loan applications, the four businesses claimed to employ between 19 and 49 people and to pay at least $150K in payroll each month, according to court filings, but in reality, all four companies were little more than shell companies, with no payroll expenses.
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Abuse Of Loan Funds For Personal Expenses
The defendants, as stated by the prosecution, didn’t use the loan funds for paying their employees or any other proper business costs. Instead, it was alleged that the men paid for personal costs with personal credit cards and sent money to family members out of PPP funds.
Inside the U.S. Loan applicants were not allowed to use the money for day-to-day expenses or other spending for personal purposes under the Small Business Association’s PPP program, which allows businesses to use loan money for specific items like payroll or employee perks.
In order to conceal their actions, Frank and Reginald Mosley created fictitious payroll accounts for certain of the firms and submitted fictitious payroll tax filings to the IRS, according to court records.
Additionally, the prosecution pointed out that Frank Mosley’s past job as an IRS revenue officer frequently involved dealing with people who were engaging in schemes to conceal assets and bank accounts by using shell firms.
As part of civil, non-criminal attempts to comply with tax laws, revenue officers are trained to spot and look into these methods, according to the U.S. Northern District of California’s attorney’s office reported.
The office also stated that as of 2011, Frank Mosley had been employed by the city of Oakland as a tax enforcement officer.
On May 18, he is scheduled to show up in federal court in Oakland for an arraignment.
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