Gonzales Man Charged in Multimillion-Dollar Scheme to Defraud the COVID-19 Employee Retention Credit Program
Summary
United States Attorney Ronald C. Gathe, Jr. announced a Bill of Information charging Damian R. Raby, age 41, of Gonzales, Louisiana, with conspiracy to launder money and obstructing the administration of the internal revenue laws. According to the Bill, between August 2022 and April 2023 Raby filed tax forms claiming Employee Retention Credit (ERC) tax credits for businesses in the Baton Rouge area that did not exist during the COVID-19 pandemic or had no legitimate business activity before it, causing the IRS to issue more than 30 checks totaling approximately $4.4 million. The Bill alleges the proceeds were moved among accounts Raby controlled and spent on luxury vehicles, a residential mortgage and other large purchases, and that Raby made false statements to an IRS agent and sent fictitious documents to the IRS. The release notes that a Bill of Information is an accusation.
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Full text
United States Attorney Ronald C. Gathe, Jr., announced that a Bill of Information has been filed charging Damian R. Raby, age 41, of Gonzales, Louisiana, with 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. According to the Bill, between August 2022 and April 2023, 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) 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 new 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 would file documents with the IRS asking the IRS to assign Employer Identification Numbers (EINs) to the fraudulent businesses, he would open bank accounts in the names of the fraudulent businesses, and he would file 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. According to the Bill, 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. According to the Bill, as Raby and his associates received the proceeds of the fraudulent scheme, they would quickly make additional financial transactions to move the fraudulent proceeds among the various accounts Raby controlled, in an attempt to conceal, disguise, and spend the proceeds. The Bill alleges that Raby used the proceeds to make large payments on numerous luxury vehicles, the mortgage of his personal residence, and numerous other large purchases. Finally, according to the Bill, 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. 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 is being prosecuted by Assistant United States Attorneys Alan A. Stevens, who also serves as Senior Litigation Counsel, and J. Brad Casey. NOTE: A Bill of Information is an accusation. The defendant is presumed innocent until and unless adjudicated guilty.
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