WASHINGTON, DC - APRIL 07: A small sign indicates the headquarters of the Internal Revenue Service on April 07, 2023 in Washington, DC. The Treasury Department announced an $80 billion plan for the IRS to become a “digital first” tax collector and focus on improving customer service and cracking down on tax evasion by corporations and the wealthy. (Photo by Chip Somodevilla/Getty Images)
Los Angeles, California – A Hollywood resident who falsely claimed more than $65 million in COVID-related tax credits through a fabricated farming business was sentenced Friday to 57 months in federal prison.
Kevin J. Gregory, 57, was sentenced by United States District Judge Josephine L. Staton, who also ordered him to pay $2,769,173 in restitution. Gregory has been in federal custody since May 2023 and pleaded guilty to one count of making false claims to the IRS earlier this year.
According to court documents, Gregory submitted a series of fraudulent tax filings between November 2020 and April 2022, falsely claiming that his nonexistent Beverly Hills-based company, Elijah USA Farm Holdings, qualified for COVID-19 relief tax credits. These credits, created by Congress during the pandemic, were designed to help businesses keep employees on payroll or provide paid sick leave for those affected by COVID-19.
Gregory claimed Elijah Farm employed dozens of workers and paid substantial wages, entitling the business to over $65 million in employee retention and paid leave tax credits. In reality, the company had no employees, paid no wages, and made no tax deposits to the federal government.
In one filing from January 2022 alone, Gregory falsely stated that Elijah Farm had paid nearly $1.6 million in wages to 33 employees and had deposited nearly $18 million in taxes. He requested a $23.8 million tax refund, of which the IRS paid out a portion.
Investigators determined that Gregory used over $2.7 million of the fraudulently obtained refunds for his personal expenses.
The case was investigated by IRS Criminal Investigation and prosecuted by Assistant United States Attorney Kristen A. Williams of the Major Frauds Section.
Gregory’s scheme is one of the more egregious examples of fraud targeting COVID-19 relief programs. In May 2021, the U.S. Department of Justice launched the COVID-19 Fraud Enforcement Task Force to coordinate efforts across federal agencies to combat pandemic-related fraud. Since its creation, the task force has focused on identifying and prosecuting individuals who exploit emergency relief programs for personal gain.
Public members with information about suspected COVID-19 relief fraud are encouraged to contact the National Center for Disaster Fraud at (866) 720-5721 or submit tips via the NCDF’s online complaint form.
Gregory faces additional consequences if he fails to repay the stolen funds as ordered. For now, he will serve his sentence in federal custody, marking a significant chapter in the DOJ’s ongoing crackdown on pandemic fraud.
