Rochester Man Pleads Guilty To COVID Fraud

Summary

A press release of the U.S. Attorney's Office for the Western District of New York dated Thursday, June 1, 2023, announcing that Kenyatta Phipps, 46, of Rochester pleaded guilty before U.S. District Judge Frank P. Geraci, Jr. to wire fraud, a charge carrying a maximum of 20 years in prison and a $250,000 fine. According to the release, after filing a 2019 return that resulted in a refund of $696, in August 2020 he tried four times to file a second 2019 return falsely reporting $333,522 in additional income from a company called Platinum Express Cleaning, which would have produced a refund of $164,951. It states that after the IRS rejected all four attempts, he filed a fraudulent amended return in September 2020.

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Full text

Press Release

Rochester Man Pleads Guilty To COVID Fraud

Thursday, June 1, 2023

For Immediate Release

U.S. Attorney's Office, Western District of New York

ROCHESTER, N.Y. - U.S. Attorney Trini E. Ross announced today that Kenyatta Phipps, 46, of Rochester, NY, pleaded guilty before U.S. District Judge Frank P. Geraci, Jr. to wire fraud. The charges carry a maximum penalty of 20 years in prison and a $250,000 fine.

Assistant U.S. Attorney Richard A. Resnick, who is handling the case, stated that in February 2020, Phipps filed a federal income tax return for the tax year 2019, reporting wages and interest income of $13,273.00, which resulted in a refund of $696. In August 2020, Phipps attempted four times to file a second 2019 federal income tax return on which he falsely reported additional income he earned in the amount of $333,522 from a company he operated called Platinum Express Cleaning. If the returns were accepted Phipps would have received a fraudulent tax refund of $164,951. After all four attempts were rejected by the IRS, in September 2020, Phipps filed a fraudulent amended federal income tax return for the year 2019, which was accepted by the IRS. In the fraudulent return, Phipps falsely reported that Platinum Express Cleaning received gross receipts of $455,734 from Eastman Kodak Company and had taxes withheld from such income of more than $355,000. This resulted in Phipps receiving a fraudulent tax refund and tax loss to the IRS of $186,570.

In addition to defrauding the IRS, Phipps used information from the false tax returns to submit three fraudulent loan applications in the name of Platinum Express Cleaning to the Small Business Administration (SBA) in attempts to obtain COVID relief funding through the Economic Injury Disaster Loans (EIDL) program provided by the 2020 CARES Act. Phipps also falsely stated on the EIDL loan applications that Platinum Express Cleaning had more than 120 employees which would have qualified his company for $573,200 on EIDL program loans. Prior to funding the EIDLs program loans, the SBA discovered the fraudulent loan applications and did not fund the loans.

The plea is the result of an investigation by the Internal Revenue Service, Criminal Investigation Division, under the direction of Special Agent in Charge Thomas Fattorusso.

Sentencing is scheduled for August 20, 2023, before Judge Geraci.

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Contact

Barbara Burns

716-843-5817

Updated June 1, 2023

Topic

Coronavirus

Component

USAO - New York, Western

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