Profiles · Defendants
- Type
- Person
- Role
- Defendant
- Programs
- ERC
- Updated
The profile
A Philadelphia man who recruited more than 20 people with idle or employee-less businesses and used their information to file payroll returns seeking over $20 million in Employee Retention Credits. The IRS issued more than $1.6 million, including over $800,000 to one Delaware company. He was sentenced in September 2025 to three years.
Identity and role
Carnell Ragan, 59, of Philadelphia, was prosecuted in the District of Delaware, No. 25-cr-0009, by the U.S. Attorney's Office in Wilmington after an IRS Criminal Investigation inquiry.
The scheme and pandemic-relief role
The Employee Retention Credit (ERC) paid a percentage of wages to employers hit by shutdown orders or revenue drops: at first 50 percent of up to $10,000 in wages per employee for 2020, and by 2021 70 percent per employee per quarter, as the office summarized the rules. It was claimed on Form 941.
According to court documents, Ragan "recruited over 20 people to take part in his ERC scheme." Each had a business entity that was "either non-operational or did not have paid employees during the COVID-19 pandemic." Ragan used their information to file false Forms 941 seeking over $20 million in ERC. The IRS issued checks worth more than $1.6 million, including more than $800,000 to a business registered in Delaware.
That is a payout of roughly 8 percent of the amount claimed.
Legal status / controversies
- Charge: assisting in the filing of false tax forms; the release does not say whether he pleaded guilty or was tried.
- Sentenced: September 11, 2025, by Chief U.S. District Judge Colm F. Connolly to three years in federal prison and more than $1.6 million in restitution to the IRS.
Where they are now (2025–2026)
The September 2025 sentence is the last public record of Ragan we found. The release does not name the recruits or say whether any of them were charged.