Northville Man Pleads Guilty to Tax and PPP Schemes Involving More Than $5.5 Million in Fraudulent Claims for Covid-era Benefits

DETROIT - James Davis, 49, of Northville, Michigan, pleaded guilty in federal court to orchestrating two related conspiracies to fraudulently obtain COVID-19 pandemic relief funds and federal tax credits, announced United States Attorney Jerome F. Gorgon, Jr.

Gorgon was joined in the announcement by Todd Strom, Acting Special Agent in Charge, Detroit Field Office, IRS Criminal Investigation and Jennifer Runyan, Special Agent in Charge of the FBI in Detroit.

Davis pleaded guilty before United States District Judge Laurie J. Michelson to one count of Conspiracy to Commit Wire Fraud, in violation of 18 U.S.C. § 1349, and one count of Conspiracy to Defraud the Government with Respect to Claims, in violation of 18 U.S.C. § 286.

According to court records, Davis organized two interconnected fraud schemes that sought to exploit federal programs created to provide financial assistance during the COVID-19 pandemic. Davis recruited individuals willing to provide their personal identifying information in exchange for a share of fraudulently obtained proceeds. As part of the schemes, Davis and others obtained or attempted to obtain Paycheck Protection Program (PPP) loans on behalf of businesses that were not entitled to receive them. Davis also recruited individuals for a related scheme that involved the submission of fraudulent claims for two types of pandemic tax credits: Sick and Family Leave Credits and Employee Retention Credits. The conspirators falsely represented that individuals and businesses qualified for these tax benefits when they did not. In total, the two schemes caused the submission of $6,225,593.55 in false claims and received $4,398,366.01 in fraudulent benefits.

Davis is scheduled to be sentenced on March 8, 2027, where he will face a maximum penalty of 20 years' imprisonment on the wire fraud conspiracy count and 10 years' imprisonment on the conspiracy to defraud the government count.

On April 7, the Department of Justice announced the creation of the National Fraud Enforcement Division ("Fraud Division"). The Fraud Division is laser-focused on investigating and prosecuting those who commit fraud against the American people. The Department's work to combat fraud supports President Trump's Task Force to Eliminate Fraud, a whole-of-government effort chaired by Vice President J.D. Vance to eliminate fraud, waste, and abuse within Federal benefit programs.

The investigation is being conducted by the Internal Revenue Service - Criminal Investigation and Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorney Ryan A. Particka.