Defendants admitted their involvement in a scheme to obtain more than $3 million in pandemic relief aid Date: May 17, 2024 Contact: newsroom@ci.irs.gov Six defendants, including a former IRS revenue officer and his brother, have been sentenced to prison terms ranging from 12 to 30 months following their convictions on charges that they fraudulently obtained millions of dollars in COVID-19 pandemic relief funds through the Paycheck Protection Program (PPP), announced United States Attorney Ismail J. Ramsey; IRS Criminal Investigation (IRS-CI) Acting Special Agent in Charge Michael Mosley of the Oakland Field Office; Small Business Administration (SBA) Office of Inspector General (OIG) Special Agent in Charge Weston King of the Western Region; and Office of Inspector General for the Board of Governors of the Federal Reserve System and Consumer Financial Protection Bureau Special Agent in Charge Jon Ellwanger of the Western Region. The sentences were handed down by the Hon. Araceli Martínez-Olguín, United States District Judge. Five defendants—Frank Mosley, of Oakland; his brother Reginald Mosley, of Sacramento; Marcus Wilborn, of Elk Grove, California; Aaron Boren, of Roseville, California; and Scott Conway, of Rocklin, California—pleaded guilty to one count of conspiracy to commit bank fraud, in violation of 18 U.S.C. § 1349. The Mosley brothers, both of whom were sentenced to 30 months in prison, also pleaded guilty to one count of aiding and advising in the filing of false tax returns, in violation of 26 U.S.C. § 7201(2). Wilborn was sentenced to 18 months in prison and Boren and Conway were each sentenced to 12 months and one day in prison for their roles in the scheme. The sixth defendant—Kenya Ellis, of Los Angeles—pleaded guilty to one count of bank fraud, in violation of 18 U.S.C. § 1344, and was sentenced to 12 months in prison. All six defendants were originally charged in May 2023. According to the defendants' plea agreements and the parties' sentencing memoranda, Frank Mosley was a tax enforcement officer for the City of Oakland and a former IRS revenue officer who conspired with others between July 2020 and September 2021 to submit fraudulent PPP loan applications and to spend his portion of the more than $3 million in loan funds he and his co-conspirators fraudulently obtained on personal investments and expenses. "At the height of a global pandemic wreaking havoc on American businesses and families, these defendants fraudulently obtained millions of dollars in aid money intended to help those who desperately needed it and used that money to enrich themselves," said United States Attorney Ismail J. Ramsey. "That one of these defendants was a former IRS revenue officer makes their crime that much more concerning. These sentences should help rebuild some of the public trust eroded by the defendants' greed." "Frank and Reginald Mosley, along with their co-conspirators, ran an abhorrent scheme that fraudulently obtained over $3 million of funds designed to help struggling businesses in the wake of a global pandemic. Even worse, Frank Mosley, a former IRS revenue agent, exploited his expertise to help cover up the scheme," said IRS-CI Acting Special Agent in Charge Michael Mosley. "No one is above the law. Fostering confidence in our financial system and public institutions is at the core of IRS Criminal Investigation's mission." "The Mosley brothers orchestrated a scheme that defrauded the federal government of over $3 million in pandemic relief funds intended to help distressed businesses for their own personal gain," said Jon Ellwanger, Special Agent in Charge, Western Region, Office of Inspector General for the Board of Governors of the Federal Reserve System and Consumer Financial Protection Bureau. "They and their co-conspirators have now been brought to justice for their actions. We are proud to have worked with our federal law enforcement partners and the U.S. Attorney's Office to achieve this result." "This sentencing sends a clear message that those who defraud SBA's programs will be held accountable," said SBA OIG's Western Region Special Agent in Charge Weston King. "Our office will remain steadfast in pursuing those who exploit such vital resources for personal gain, ensuring accountability, and justice for the American taxpayer. I want to thank the U.S. Attorney's Office and our law enforcement partners for their unwavering commitment to pursuing justice in this case." According to their plea agreements, the Mosley brothers, Wilborn, Boren, and Conway each admitted their involvement in a scheme to obtain millions of dollars in PPP loans by submitting fraudulent documents on behalf of companies the defendants falsely certified had dozens of employees and hundreds of thousands of dollars in monthly payroll expenses. In fact, these were shell companies with no legitimate employees and no payroll expenses. The defendants also admitted they did not use the PPP loan funds they fraudulently obtained on legitimate business expenses; rather, they admitted using those funds for personal expenses and investments, to pay their personal credit card bills, and to transfer money to family members. According to their plea agreements, Frank and Reginald Mosley submitted a fraudulent loan application on behalf of Forward Thinking Investors, Inc., an entity they controlled, in August 2020. They received more than $1 million in PPP funds, and Reginald Mosley thereafter recruited acquaintances (including Wilborn, Boren, and Conway) who owned companies that existed before February 2020 to submit additional fraudulent loan applications. Frank and Reginald Mosley helped prepare fraudulent loan applications for Wilborn, Boren, and Conway, who kicked back some of the PPP funds they received to the Mosley brothers. In fact, Frank and Reginald Mosley admitted they drafted a contract under which they would receive at least 15 percent of any fraudulently obtained PPP funds in exchange for their assistance in preparing and submitting fraudulent applications for Wilborn, Boren, and Conway. Finally, Frank and Reginald Mosley admitted filing fraudulent payroll tax returns with the IRS to cover up their scheme. In her plea agreement, Ellis admitted she aided and advised the Mosley brothers and others in connection with their fraudulent PPP loan applications. She also admitted that, in 2020 and 2021, she fraudulently obtained almost $300,000 in PPP loans and other pandemic-relief aid in connection with an entity she falsely claimed to own and about which she made other material false statements, including regarding its number of employees and monthly payroll expenses. In fact, Ellis was unaffiliated with the entity, whose true owner had no awareness of, or involvement in, the preparation and submission of Ellis' loan applications. The PPP was administered by the SBA as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a federal law enacted in March 2020 to provide billions of dollars in emergency financial assistance to millions of Americans suffering from the economic effects of the COVID-19 pandemic. The PPP provided forgivable loans to small businesses for job retention and certain other qualified business expenses. In addition to sentencing all six defendants to prison, Judge Martínez-Olguín ordered each of them to serve three years of supervised release to begin after their prison terms are completed. Judge Martínez-Olguín also ordered each defendant to pay restitution in an amount to be set at a later date. Assistant U.S. Attorney Abraham Fine is prosecuting these cases with assistance from Kay Konopaske. The prosecutions are the result of an investigation by IRS-CI, SBA OIG, and the Office of Inspector General for the Board of Governors of the Federal Reserve System and Consumer Financial Protection Bureau.
