Gonzales man sentenced to 18 years in federal prison for multimillion-dollar scheme to defraud the COVID-19-era employee retention credit program

Date: Nov. 13, 2025

Contact: [email protected]

United States Attorney Kurt Wall announced that U.S. District Judge John W. deGravelles sentenced Damian R. Raby of Gonzales, Louisiana, to 216 months in federal prison following his convictions for conspiracy to launder money and obstructing the administration of the internal revenue laws, relating to a multimillion-dollar scheme to defraud a COVID-19 economic relief program. The Court further ordered Raby to serve three years of supervised release after completing his term of imprisonment. In addition to the term of imprisonment, the Court ordered Raby to pay $2,603,678.04 in restitution to the U.S. Treasury and forfeit an additional $2,045,241.58.

According to admissions made as part of his guilty plea, Raby devised a scheme to defraud the United States, through the Internal Revenue Service, by preparing and filing tax forms fraudulently claiming Employee Retention Credit (ERC) refundable tax credits on behalf of numerous businesses purportedly located in the Baton Rouge area-businesses that either did not exist during the COVID-19 pandemic or that did not have any legitimate business activity prior to the pandemic. The ERC program was a tax credit provided by the Coronavirus Aid, Relief, and Economic Security Act ("CARES" Act), intended to encourage businesses to keep employees on their payroll during the COVID-19 pandemic.

As part of the scheme, Raby filed documents with the IRS asking the IRS to assign Employer Identification Numbers (EINs) to the fraudulent businesses, he opened bank accounts in the names of the fraudulent businesses, and he filed tax forms in which he falsely represented the businesses' number of employees and payroll amounts and falsely claimed that the businesses were entitled to large tax credits. In total, Raby filed fraudulent applications on behalf of dozens of businesses and caused the IRS to issue more than 30 checks totaling approximately $4.4 million.

As Raby and his associates received the proceeds of the fraudulent scheme, they would try to conceal and disguise the proceeds by quickly making additional financial transactions and moving the fraudulent proceeds among the various bank accounts Raby controlled. Raby then used the proceeds to make large payments on numerous luxury vehicles, the mortgage of his personal residence, and numerous other large purchases.

Later, after Raby became aware of a pending investigation into his conduct, he obstructed and impeded the investigation, including by making false statements to an IRS agent, sending fictitious documents to the IRS, and encouraging one of the witnesses to provide false information to the IRS.

U.S. Attorney Wall stated, "My office has emphasized that efforts to prosecute COVID-19-related fraud are critical to maintaining the integrity of government relief programs. This sentence is a demonstration of our commitment to protecting public funds from fraudsters using deceptive tactics."

"Damian Raby is one of many people who defrauded a program designed to help businesses retain employees during the COVID-19 pandemic," said Special Agent in Charge Demetrius Hardeman, IRS Criminal Investigation, Atlanta Field Office. "He then tried to hide his ill-gotten gains through money laundering. IRS Criminal Investigation special agents are skilled financial investigators who can unravel complex financial transactions and money laundering schemes."

"This sentencing demonstrates the commitment of the Treasury Inspector General for Tax Administration (TIGTA), along with our law enforcement partners, to aggressively investigate those who commit financial crimes that harm the tax administration system and victimize law abiding Americans," stated Special Agent in Charge Joel Weaver. "This case highlights the expertise and dedication of TIGTA special agents, who are determined to protect the financial infrastructure of the United States."

Meanwhile, as part of the investigation, the United States has lawfully seized more than $600,000 from bank accounts controlled by Raby and seized and forfeited a single-family residence in Gonzales, Louisiana that Raby largely acquired with fraudulent proceeds. In addition, and previously in this investigation, the United States convicted Kenyall Williams of Baton Rouge, Louisiana, of conspiracy to commit mail fraud and make unlawful monetary transactions. As Williams admitted as part of her guilty plea, she became aware that Raby was involved in a criminal scheme and she knowingly became involved in the scheme, by assisting Raby and making financial transactions at his direction in exchange for a small share of the proceeds. The Court sentenced Williams to serve a three-year term of probation, pay $555,069.47 in restitution, and forfeit an additional $41,756.70.

This matter was investigated by the Internal Revenue Service, Criminal Investigation, and the United States Treasury Inspector General for Tax Administration, with valuable assistance from the East Baton Rouge Parish Sheriff's Office, and was prosecuted by Assistant United States Attorney Alan A. Stevens, who also serves as Senior Litigation Counsel, and Assistant United States Attorneys Brad Casey and Katherine Green.

IRS Criminal Investigation (IRS-CI) is the law enforcement arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money laundering, public corruption, healthcare fraud, identity theft and more. IRS-CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a 90% federal conviction rate. The agency has 19 field offices located across the U.S. and 14 attaché posts abroad.