The IRS Criminal Investigation unit has launched 2,039 tax and money laundering cases related to COVID fraud, with attempted fraud in these cases totaling $10 billion, since the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law in March 2020, the agency said on Wednesday.
As of Feb. 28, 2025, 1,028 people have been indicted for their alleged COVID-related crimes, and 569 individuals have been sentenced to an average of 31 months in federal prison. IRS-CI said it has obtained a 97.4% conviction rate in prosecuted COVID fraud cases, and many investigations are ongoing.
The COVID fraud cases include a broad range of criminal activity, including fraudulently obtained loans, credits, and payments meant for American workers, families, and small businesses.
“It’s been five years since Congress enacted the CARES Act, and our special agents have used their financial acumen to root out thousands of instances of fraud, waste, and abuse tied to CARES Act programs. In the past year alone, our special agents initiated 380 new investigations into COVID fraud,” IRS-CI Chief Guy Ficco said in a statement on March 26. “CARES Act fraudsters have no regard for their fellow Americans. In many cases they stole funds and spent them on luxury items ranging from trips to cars—all while businesses who should have received these funds were floundering due to unprecedented economic hardship.”
As part of its COVID fraud investigations, IRS-CI said it has been extremely focused on investigating instances of Employee Retention Credit (ERC) fraud. The ERC is a refundable tax credit that was enacted during the height of the COVID-19 pandemic to encourage businesses to keep their employees on payroll. However, the program became inundated with fraud—much of which the IRS blames on aggressive marketing tactics by ERC promoters and misleading claims by so-called ERC mills, which encouraged ineligible businesses to apply for the credit.
President Donald Trump’s pick to be the next IRS commissioner, Billy Long, a former Republican congressman from Missouri, reportedly promoted the ERC to businesses as a tax advisor after he left Congress in 2023. Some Senate Democrats, led by Elizabeth Warren from Massachusetts, have been critical of Long’s nomination as head of the IRS, with Warren saying in a January letter to Long that his promotion of the ERC has been flagged by the tax agency for its high rate of fraud. The Senate has yet to schedule confirmation hearings for Long.
As of Feb. 28, IRS-CI has initiated 545 investigations involving more than $5.6 billion in ERC fraud in tax years 2020, 2021, 2022, and 2023. Seventy-five of the 545 investigations have resulted in federal charges. So far, 38 defendants in those cases have been convicted, with 18 defendants sentenced to an average of 21 months in prison, IRS-CI said.
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