Ex-IRS Agent, Five Others Charged in COVID Fraud Plot

By George Kelly, Silicon Valley, San Jose, CA (TNS)

A 58-year-old Oakland man and five others have been charged with various crimes related to a multimillion-dollar COVID-loan fraud scheme, a U.S. Justice Department spokesman said Wednesday.

At the center of the scheme, according to federal prosecutors, is former IRS agent Frank Mosley, who was also identified as a “current city of Oakland tax enforcement officer.”

According to charging documents, Mosley took advantage of the federal government’s COVID-era Payroll Protection Program by submitting fraudulent applications and then using the loan money for personal expenses and investments. Also charged were his brother, Reginald Mosley, 60, and friends Aaron Boren, 56, of Roseville, CA, Scott Conway, 52, of Rocklin, CA, and Marcus Wilborn, 50, of Elk Grove, CA.

From July 2020 to September 2021, the group allegedly faked documents for four shell companies, asserting that each were businesses with between 19 to 49 employees with a monthly payroll between $150,000 to $430,000.

In addition, charging documents said the Mosley brothers’ August 2020 application for their shell company, Forward Thinking Investors Inc., drew just over $1 million, leading Reginald Mosley to get Boren, Conway, and Wilborn, who each owned companies before February 2020, to submit their own PPP loan applications.

When those loans were approved, the men used those funds for “significant personal expenses, personal credit cards, personal investments, and distributions to their family members,” the Justice Department said. In addition, the Mosley brothers allegedly demanded a 15% kickback of loan proceeds from the others by circulating a written-out contract via email. They then filed fake payroll tax returns with the IRS to conceal receipt of those funds, authorities allege.

In all, the group received approximately $3 million, the Justice Department said.

A sixth person, Kenya Ellis, 55, of Los Angeles, worked with the Mosleys and others to submit faked PPP loans, drawing in nearly $300,000 by using the name of a company, Global Processor Inc. Although she made claims about the company’s payroll and employee numbers, Ellis “had no legitimate relationship with GPI and the true owner of GPI had no awareness of, nor involvement in, the preparation and submission of the loan applications,” according to newly filed federal case.

The men are charged with conspiracy to commit bank fraud and face up to 30 years in prison. The Mosley brothers face an additional maximum of three years in prison for aiding and advising in filing of false tax returns. Ellis faces her own separate bank fraud charge, with a maximum sentence of 30 years in prison.

All six defendants face initial court appearances later this month before Judge Kandis Westmore, with Conway appearing May 15, Ellis on May 16, the Mosley brothers and Boren on May 18, and Wilborn on May 23.

Assistant U.S. Attorney Abraham Fine will prosecute the case, which came from an investigation by the IRS’s Criminal Investigative Division, the Bureau of Consumer Financial Protection, and the offices of the inspector generals for the Small Business Administration and the Board of Governors of the Federal Reserve System, with help from Kay Konopaske.

The Payroll Protection Program was designed to help businesses during the pandemic and run by the Small Business Administration under the March 2020-enacted Coronavirus Aid, Relief, and Economic Security Act.

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