Two Men Charged in $52 million COVID-19 Tax Credit Fraud Conspiracy

HARRISBURG - U.S. Attorney Brian D. Miller announced that a California man was arrested on Monday after a grand jury sitting in Harrisburg, Pennsylvania returned an indictment charging him with conspiracy, mail fraud and money laundering.

According to the indictment, Christopher Slater was part of a multi-state conspiracy to defraud the United States of more than $52.7 million by filing hundreds of false tax returns claiming Paid Sick and Family Leave Credit (SFLC) and Employee Retention Credit (ERC) credits. Congress authorized the SFLC tax credit to reimburse businesses for wages paid to employees who were on sick or family leave and could not work because of COVID-19. Congress authorized the ERC to incentivize businesses to keep employees on their payroll during the COVID-19 pandemic.

Slater allegedly conspired with others to recruit business owners, use their information to file false tax returns and then launder the proceeds of the fraud. In total, Slater allegedly caused at least 280 false tax returns to be filed for 35 businesses claiming over $52.7 million in COVID-19 tax credits, of which the IRS paid out over $32.2 million.

The indictment also charged Mark Keagel, of York, Pennsylvania, with money laundering, conspiracy and theft of government property. Keagel owned two defunct businesses whose information he allegedly passed on to one of Slater's co-conspirators. According to the indictment, Slater's associates filed false tax returns on behalf of Keagel's businesses. In response, the IRS mailed approximately $3.6 million in fraudulent Treasury checks to Keagel, who then allegedly laundered those proceeds.

"This indictment alleges that Christopher Slater orchestrated a multi-state fraud scheme that sought more than $50 million in taxpayer-funded pandemic relief funds," said Assistant Attorney General Colin M. McDonald of the Justice Department's National Fraud Enforcement Division.

"This brazen fraud is unacceptable and will not be tolerated. The Fraud Division will continue to hold anyone accountable who steals from American taxpayers and abuses programs intended to provide relief during a national crisis."

"This indictment shows our Office's longstanding commitment to prosecuting fraudsters and protecting our tax dollars," said U.S. Attorney Brian D. Miller." "This Office will continue to work with our law enforcement partners to stop these schemes and protect taxpayers hard earned money."

"IRS-Criminal Investigation is committed to protecting the integrity of our financial system by disrupting complex financial crimes and pursuing those responsible, stated Yury Kruty, Special Agent in Charge, IRS-Criminal Investigation, Philadelphia Field Office."

If convicted, Slater faces a maximum sentence of up to 20 years in prison for each of the seven mail fraud and mail fraud conspiracy counts. Slater and Keagel also face a maximum sentence of up to 10 years in prison for each of the money laundering and money laundering conspiracy counts. Keagel faces a sentence of up to ten years in prison for each count of theft of government property.

Assistant Attorney General Colin McDonald of the Justice Department's National Fraud Enforcement Division and U.S. Attorney Brian D. Miller of the Middle District of Pennsylvania made the announcement.

IRS Criminal Investigation is investigating the case.

Assistant Deputy Chief Ezra Spiro of the Criminal Division's Tax Section and Assistant U.S. Attorney Ravi Romel Sharma of the Middle District of Pennsylvania are prosecuting the case.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

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.

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