Utah County Residents and an Accounting Business Charged in $11 Million COVID-Related Tax Fraud Scheme

Salt Lake City, Utah – A federal grand jury in Salt Lake City, Utah returned an indictment Wednesday charging two Utah County men and COS Accounting & Tax LLC, dba 1099 Tax Pros with a COVID-related tax fraud scheme to defraud the United States of America of millions of dollars.

According to court documents, Zachary Bassett, 39, of Provo, Mason Warr, 37, of Vineyard and COS Accounting & Tax LLC, dba 1099 Tax Pros located in Provo, participated in a fraudulent tax scheme to seek COVID-related relief funds by preparing and submitting more than one thousand tax forms to the IRS, claiming in excess of $11 million in false and fraudulent Employee Retention Credit (ERC) and sick and family leave wage credits for clients of COS Accounting.

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), enacted in March 2020, provides an employee retention tax credit (ERC) and is designed to encourage businesses to keep employees on their payroll. The Families First Coronavirus Response Act (FFCRA) requires certain employers to provide employees with paid sick leave of up to 80 hours and expanded family and medical leave of up to 10 weeks for specified reasons related to COVID-19.  FFCRA provides refundable tax credits that reimburse employers for the cost of providing paid sick and family leave wages to employees for leave related to COVID-19.

“During the pandemic, the defendants allegedly took advantage of a program intended to provide critical relief for businesses impacted by the COVID-19 outbreak,” said IRS Criminal Investigation Special Agent in Charge Albert Childress.  "IRS CI is committed to bringing justice to those who have exploited the pandemic for personal gain and have stolen from America’s taxpayers.”

The indictment charges Bassett, Warr and COS Accounting & Tax LLC, dba 1099 Tax Pros with conspiracy to defraud the United States, wire fraud and aiding and assisting in filing false tax returns.  According to the indictment, the scheme to defraud took place from at least April 2020 through at least August 2021 in the District of Utah.  Defendants were also provided notice that if convicted of the charges, defendants would forfeit to the United States of America any property constituting or derived from proceeds traceable to the scheme to defraud.  An initial appearance for the defendants is scheduled for February 22, 2023, at 1p.m. at the U.S. District Court in Salt Lake City.

U.S. Attorney Trina A. Higgins for the District of Utah made the announcement.

Assistant U.S. Attorney, Jennifer K. Muyskens, for the District of Utah is prosecuting the case.

The IRS-Criminal Investigation is investigating the case.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866 720 5721 or via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form. 

An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.