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Former Bklyn Resident Pleads Guilty to $3Million COVID-Relief Fraud Scheme

The defendant used shell companies to falsely generate unearned tax refunds and claim COVID-19 Emergency Relief earmarked for distressed businesses
Photo: Shutterstock

Former Brooklyn resident Patrick Poux plead guilty on Tuesday to filing false applications for hundreds of thousands of dollars in COVID-19 emergency relief loans in 2020 under the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Program  (EIDL).

Poux also pleaded guilty to fraudulently generating and submitting false tax return applications claiming millions of dollars in unearned tax refunds between 2016 and 2019. 

As set forth in court filings, between March 2020 and September 2020, amid the  COVID-19 pandemic, Poux fraudulently applied for PPP and EIDL loans and grants totaling approximately $320,000, on behalf of himself and corporate entities he controlled. Poux received approximately $183,000 in COVID-19 relief loans and grants to which he was not entitled, and he spent those funds on personal expenses, including a life coach and luxury goods  from stores such as Saks Fifth Avenue.  

“Poux lived a rich lifestyle filled with luxury goods while stealing hundreds of thousands of dollars from those who need the funds for their businesses to thrive. U.S. taxpayers have paid the bill for his lavish purchases for far too long, and today’s guilty plea ensures that Poux will soon pay it back by facing the consequences of his actions," said Thomas Fattorusso, Special Agent-in-Charge of the Internal Revenue Service-Criminal Investigation.

To advance the scheme, Poux created false tax forms for shell companies that  had no operations or employees. He gave co-conspirators tax forms that falsely reported that the  co-conspirator had worked at a shell company and had withheld income—even though the co conspirator never worked at the shell company.

Using these falsified forms, co-conspirators  could claim substantial refunds from the United States Internal Revenue Service (IRS). In  return, Poux received a percentage of such refunds. Poux and others submitted approximately 250 claims seeking a total of approximately $2.8 million in tax refunds from the IRS. 

“This Office will vigorously prosecute individuals who steal taxpayer dollars, especially from critically important government programs designed to help  struggling small businesses and families stay afloat during the pandemic," said Breon Peace, United States Attorney for the Eastern District of New York.

Poux faces up to 30 years in prison and a fine of up to $1 million.