E. Martin Estrada, U.S. Attorney | U.S. Attorney's Office for the Central District of California
A Hollywood resident, Kevin J. Gregory, 57, has been sentenced to 57 months in federal prison for fraudulently seeking over $65 million from the IRS through false tax claims. United States District Judge Josephine L. Staton also ordered Gregory to pay restitution amounting to $2,769,173.
Gregory pleaded guilty on January 17 to one count of making false claims to the IRS and has been in federal custody since May 2023. He admitted to falsely claiming that his nonexistent farming business was entitled to COVID-19-related tax credits.
In response to the pandemic's economic impact, Congress authorized an employee retention tax credit aimed at helping small businesses reduce employment taxes owed to the IRS. To qualify for this credit, a business had to be operational in 2020 and experience a partial suspension due to government orders related to COVID-19 or a significant decline in profits.
From November 2020 to April 2022, Gregory submitted false claims totaling nearly $65.3 million for a fictitious Beverly Hills-based company named Elijah USA Farm Holdings. The IRS issued some refunds claimed by Gregory, who used over $2.7 million for personal expenses.
Specifically, in January 2022, he falsely claimed a tax refund of $23,877,620 as part of Elijah Farm’s quarterly federal tax return. He asserted that Elijah Farm employed 33 people and paid nearly $1.6 million in wages when it actually employed no one and made no such payments.
The case was investigated by IRS Criminal Investigation and prosecuted by Assistant United States Attorney Kristen A. Williams of the Major Frauds Section.
The Attorney General established the COVID-19 Fraud Enforcement Task Force on May 17, 2021, enhancing efforts against pandemic-related fraud through partnerships across government agencies.
Reports of attempted COVID-19 fraud can be made via the Department of Justice’s National Center for Disaster Fraud Hotline at (866) 720-5721 or through their online complaint form.
