Tax Controversy & Financial Crimes Report

Readers Choice

July 2019

By Matthew S. Adams, Kelley Hodge, Matthew D. Lee and Marissa Koblitz Kingman The Department of Justice (DOJ) has intensified its already aggressive crackdown on fraud related to COVID-19, recently announcing criminal charges against a telemedicine company executive, a physician, marketers and medical business owners for losses exceeding $143 million. These recent prosecutions provide a clear warning to all health care-related businesses that there will be enhanced scrutiny of the use of government funds related…
By Matthew S. Adams and Marissa Koblitz Kingman The Small Business Administration is conducting inquiries into some of the loans obtained through the Paycheck Protection Program that seek details about a company’s financial status not only before the loan was requested, but after the loan was received. Businesses that are asked to complete SBA Form 3509 face considerable risk because many companies did better than expected financially after receiving a PPP loan, despite the initial…
By Matthew D. Lee and Marissa Koblitz Kingman Intensifying its crackdown on suspected fraud in pandemic relief programs, the U.S. Department of Justice has established the COVID-19 Fraud Enforcement Task Force, sending a clear message that any individual or business that benefited from government aid should expect enhanced scrutiny. Due to the unprecedented scope of the aid programs and that they were administered by the government, the Task Force already has access to millions of…
By Gabriel Herman and Marissa Koblitz Kingman Paycheck Protection Program (PPP) loans were designed to help small businesses cover explicit allowable expenses during the COVID-19 pandemic. There are various eligibility requirements that businesses must satisfy before applying for PPP loans and subsequently upon seeking forgiveness. Because the loans were sought and made at rapid speed, many business owners unknowingly made errors in the application process or while spending the loan monies. Many lenders did not…
April 20, 2021 – Alerts By Matthew D. Lee and Marissa Koblitz Kingman The Justice Department continues to intensify its crackdown on COVID-19 relief program fraud, a clear indication that any individual or business that has benefited from the government aid should expect enhanced scrutiny from various government agencies in the coming months and possibly years. The Coronavirus Aid, Relief, and Economic Security (CARES) Act, enacted in March 2020, was intended to provide emergency financial assistance to those…
By Patrick J. Egan, Joshua Horn and Stephanie Ohnona Two businessmen have been convicted in U.S. District Court for the Southern District of New York of helping a California-based cannabis company avoid bank flags for illegal cannabis-related transactions. A New York jury found the men guilty of bank fraud conspiracy in violation of 18 U.S.C. § 1349. Eaze, a cannabis product delivery app developer, aimed to let customers purchase cannabis products with their credit…
Joshua Ashby and Kimberly L. Kwan have co-authored a Corporate Compliance Insights article entitled “How the Corporate Transparency Act Shakes Up AML: Beneficial Ownership Updates and More.” Their article addresses the recently-enacted Corporate Transparency Act, and how that new law changes what constitutes beneficial ownership and establishes more robust automated data collection. In addition, the law increases responsibilities and incentives for employees to blow the whistle on money-laundering activity. You can read the full article…
By Matthew D. Lee and Marissa Koblitz Kingman The Justice Department has widened its crackdown on COVID-19 fraud, announcing the first criminal case alleging misuse of federal relief funds designated for medical providers. The egregious nature of the alleged fraud and relatively small amount of funds involved provide valuable clues about the pace, breadth and focus of future prosecutions. The Coronavirus Aid, Relief, and Economic Security (CARES) Act, enacted March 29, 2020, established the Provider…
In recognition of the continuing economic hardship caused by the COVID-19 pandemic, the Internal Revenue Service is easing its collection activities to avoid the seizure of bank accounts containing either Economic Impact Payments or Paycheck Protection Program loan proceeds. In a guidance memorandum issued to all collection employees, the IRS has directed that before issuing a levy, employees should contact the taxpayer in question to determine if it received a PPP loan, and if so,…