On August 29, 2024, the Department of Justice announced Roy L. Layne, an Arizona resident, pleaded guilty to charges of wire fraud and filing a false refund claim with the IRS. Layne’s plea is connected to allegations that he submitted false applications for COVID-19 relief funds and sought substantial tax refunds based on incorrect information.

According to court documents, between 2020 and 2021, Layne submitted applications to the U.S. Small Business Administration (SBA) on behalf of several purported businesses to obtain loans under the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program. These programs were designed to provide financial relief to businesses affected by the economic impacts of the COVID-19 pandemic. 

Layne’s applications reported the businesses had dozens of employees and significant gross receipts, supported by “false business and employment tax forms” submitted to the SBA and the IRS. Based on these submissions, The government alleged that Layne obtained more than $300,000 in loans. Additionally, the government claims that in 2022, Layne filed tax returns with the IRS seeking nearly $7.5 million in refunds, of which approximately $550,000 was paid before the claims were identified as false.

Layne is scheduled for sentencing on February 3, 2025. He faces a maximum penalty of 30 years in prison for each wire fraud count and up to five years for the false refund claim. In addition to potential imprisonment, he could also be subject to supervised release, restitution, and monetary penalties. The final sentence will be determined by a federal district court judge, who will take into account the U.S. Sentencing Guidelines and other relevant factors.

Individuals and businesses applying for federal assistance or filing tax returns should ensure the accuracy of their submissions to avoid legal complications. If you are under investigation or have concerns about your involvement with relief programs or tax filings, seeking experienced legal counsel is essential.

The attorneys at Chilivis Grubman have extensive experience representing clients in matters involving federal investigations, tax crimes, and fraud-related cases. If you need guidance or representation, please contact us today.