South L.A. Man Pleads Guilty to Scheming to Defraud IRS Out of $9.3 Million via Bogus COVID-19 Business-Relief Tax Credits
Summary
Darrick Wynell Brazier, 58, of Manchester Square, pleaded guilty to one count of mail fraud for scheming to fraudulently obtain more than $9.3 million through the COVID-19 paid sick and family leave credit, according to the release. Under the plea agreement, from July 2022 to December 2023 Brazier used tax-filing software to file fraudulent forms 941 for two entities that existed on paper only, DWB Holdings LLC and Brazier Transportation, claiming credits for wages never paid to employees who never existed. Brazier also admitted helping at least six ineligible client businesses file fraudulent forms in return for $1,096,096 in kickbacks. In total the filings sought approximately $11,514,618 in fraudulent refunds, of which the IRS paid approximately $9,336,130. Sentencing is scheduled for February 24, 2027; Brazier faces a statutory maximum of 20 years in federal prison.
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LOS ANGELES – A South Los Angeles man pleaded guilty today to scheming to fraudulently obtain more than $9.3 million via shell companies as part of a COVID-19 pandemic relief program that provided refundable employment tax credits to employees who took sick leave due to isolation or quarantine orders. Darrick Wynell Brazier, 58, of Manchester Square, pleaded guilty to one count of mail fraud. To help alleviate the impact of COVID-19, Congress passed a law authorizing tax credits that reimbursed businesses for the wages paid to employees who could not work because of the pandemic. The Family First Coronavirus Response Act and its amendments authorized the IRS to give a credit against employment taxes to reimburse businesses for the wages paid to employees who were on sick or family leave and could not work because of COVID-19, also known as the “paid sick and family leave credit.” The credit equaled the wages the business paid to employees during the eligible period of sick or family leave, subject to a maximum amount. Taxpayers could request the credit using a form that required them to truthfully state the number of employees, the businesses’ quarterly wages paid to employees, and the credit would be used to calculate the refund, or overpayment that the taxpayer requested from the IRS. The taxpayer could either request that the IRS carry over any refunds to the next quarter or pay the refunds to the taxpayer which the IRS would issue in the form of United States Treasury checks, which it mailed to recipients. According to his plea agreement, from July 2022 to December 2023, Brazier used tax-filing software to submit fraudulent forms to the IRS requesting tax credits for businesses, including shell companies, that did not pay any sick and family wage credits to its employees at the time. Brazier filed fraudulent forms 941 for two entitles held in his name: DWB Holdings LLC and Brazier Transportation. The filed forms listed Brazier as the signor on the returns. The entities existed on paper only and filed claims for refunds of the credit for sick leave based on wages that the entities never paid to employees who never existed. The IRS relied on these fraudulent representations to mail Brazier Treasury checks on behalf of these shell companies. Brazier further admitted to assisting in the fraudulent filings of tax forms on behalf of clients who paid him a kickback if their fraudulent tax filings were successful and they received U.S. Treasury checks in the mail. Brazier received kickbacks from these clients by way of cashier’s checks to himself, his businesses, or other nominees to whom Brazier directed payments. He helped in the fraudulent tax form filings for at least six ineligible businesses of his clients and received $1,096,096 in kickbacks from them. In total, Brazier’s scheme on behalf of his two ineligible businesses, and that of the six ineligible businesses for his fraud clients sought approximately $11,514,618 of fraudulent tax refunds from the IRS, of which the IRS paid approximately $9,336,130. He further admitted to never reporting to the IRS any of the unlawful income he received because of his involvement in this fraud scheme. United States District Judge Michael W. Fitzgerald scheduled a February 24, 2027, sentencing hearing, at which time Brazier will face a statutory maximum sentence of 20 years in federal prison. IRS Criminal Investigation is investigating this matter. Assistant United States Attorney Haoxiaohan H. Cai of the Major Frauds Section is prosecuting this case.
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