Independence Man Pleads Guilty to $1.4 Million COVID Fraud Scheme
Summary
Richard Dean Schiele, Jr., 51, of Independence, Mo., pleaded guilty before U.S. Chief District Judge Beth Phillips to one count of filing a false claim in a scheme to receive nearly $1.4 million in COVID-19 Employee Retention Credits, the U.S. Attorney's Office in Kansas City announced. Schiele admitted filing nine Employer's Quarterly Tax Return forms with the IRS on April 22, 2023 for Schiele Family Own Distribution, a company formed the same month, claiming a total of $1,392,716 in pandemic-era credits. The company had no employees in 2020 through 2022. The IRS issued checks totaling $478,890, and the Treasury Department recovered $348,764.91 from Schiele's bank account. The plea agreement requires $130,125 in restitution to the IRS, and the charge carries up to five years in federal prison. IRS-Criminal Investigation investigated.
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Full text
KANSAS CITY, Mo. – An Independence, Mo., man pleaded guilty in federal court today to filing a false claim as part of a scheme to fraudulently receive nearly $1.4 million in COVID-19 relief funds from the government. Richard Dean Schiele, Jr., 51, waived his right to a grand jury and pleaded guilty before U.S. Chief District Judge Beth Phillips to a federal information that charges him with one count of filing a false claim. The Coronavirus Aid, Relief, and Economic Security Act (“CARES” Act) provided for an Employee Retention Credit designed to encourage businesses to keep employees on their payroll. The Employee Retention Credit is available to eligible employers that paid qualified wages to some or all employees after March 12, 2020, and before Jan. 1, 2022. By pleading guilty today, Schiele admitted he filed nine Employer’s Quarterly Tax Return forms with the IRS on April 22, 2023, for a company he formed the same month called Schiele Family Own Distribution. The returns made a total of $1,392,716 in claims for COVID–19 pandemic era credits against the company’s ostensible employment taxes. In reality, Schiele admitted, the company did not have any employees in 2020 through 2022. Based on these false claims, the IRS issued checks totaling $478,890 to Schiele. The Treasury Department recovered $348,764.91 from Schiele’s bank account. Under the terms of today’s plea agreement, Schiele must pay $130,125 in restitution to the IRS. Under federal statutes, Schiele is subject to a sentence of up to five years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office. This case is being prosecuted by Assistant U.S. Attorney Paul S. Becker. It was investigated by IRS-Criminal Investigation.
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