A Philadelphia man was sentenced on March 10 to 18 months in federal prison and ordered to pay $866,171 in restitution after being convicted of stealing COVID-19 relief funds. Chief U.S. District Judge Colm F. Connolly handed down the sentence.
The case centers on the Employee Retention Credit (ERC), a federal tax credit created by Congress to help businesses retain employees during the economic challenges caused by the COVID-19 pandemic. The ERC initially provided a 50% credit on up to $10,000 in wages per employee per year for qualifying businesses, with that percentage increasing to 70% per employee per quarter in 2021.
According to court documents, Andre Summerville, age 55, operated a Delaware-based business and participated in a scheme that defrauded the United States out of money intended for small businesses affected by the pandemic. Summerville provided personal and business information that was used to submit false tax forms seeking ERC payments from the Internal Revenue Service (IRS). As a result, he received over $866,000 in checks from the IRS, which he deposited into his accounts. More than $170,000 was withdrawn as cash, and additional funds were spent on luxury items or transferred to others involved in the scheme.
U.S. Attorney Benjamin L. Wallace said, “Congress passed COVID-19 relief legislation to help hard-working Americans cope with the financial turmoil caused by the COVID-19 pandemic. It is an insult to the American taxpayer when fraudsters like Andre Summerville divert those relief funds to enable themselves to lead lives of luxury. My office and our law enforcement partners will continue to investigate and hold responsible all those who steal from the government and the American people to line their own pockets.”
“Mr. Summerville deliberately defrauded a government program designed to assist eligible businesses affected by the COVID-19 pandemic,” said Philadelphia Field Office Special Agent in Charge Yury Kruty of Internal Revenue Service – Criminal Investigation (IRS-CI). “Yesterday’s sentencing holds Mr. Summerville accountable for his criminal actions and shows that our office will continue working to bring charges against individuals who commit these crimes.”
The investigation was conducted by IRS-CI and prosecuted by Assistant U.S. Attorney Jesse S. Wenger.
