Arizona Man Sentenced to Prison for COVID-19 and Tax Fraud

An Arizona man was sentenced to 4 years in prison for filing false tax returns and loan applications to obtain COVID-19 disaster relief.

According to court documents and evidence presented in court, to create the appearance that he was operating several businesses, Roy Layne of St. David, Arizona filed paperwork with the IRS, applied for a business license from the City of Tuscon, opened business bank accounts, and filed false employment-related tax returns. In April 2020, he filed an application with the U.S. Small Business Administration, that claimed he operated a “wholesale” business with 17 employees that had revenue of more than half a million dollars a year. In 2021, he submitted a false application for a Paycheck Protection Act Loan, claiming that same “wholesale” business had 31 employees, and $1.2 million in revenue. Layne ultimately received $306,700 in COVID-19 related loans to which he was not entitled.

In addition, Layne used the personal identifying information and identity of another person to file false claims for refunds with the IRS. In total, Layne claimed over $7.4 million in false refunds, of which the IRS paid $590,000.

In addition to the term of imprisonment, U.S. District Judge John C. Hinderaker ordered Layne to serve three years of supervised release and to pay $856,692.91 in restitution to the United States.

Acting Deputy Assistant Attorney General Karen E. Kelly of the Justice Department’s Tax Division and Interim U.S. Attorney Timothy Courchaine of the District of Arizona made the announcement.

IRS Criminal Investigation and the Federal Bureau of Investigation are conducting the investigation.

Trial Attorney Matthew R. Hoffman of the Tax Division and Assistant U.S. Attorney Mary Sue Feldmeier of the District of Arizona are prosecuting the case.