ROCHESTER, N.Y. (WROC) — A Rochester man pleaded guilty to wire fraud Thursday, according to the U.S. Attorney’s Office.
Prosecutors say in February 2020, Kenyatta Phipps, 46, filed a federal income tax return for the tax year of 2019, reporting wages and interest income of $13,273, which resulted in a refund of $696.
In August 2020, according to the U.S. Attorney’s Office, Phipps attempted four times to file a second 2019 federal income tax return, where he falsely reported additional income, he earned in the amount of $333,522 from the company he operated, Platinum Express Cleaning.
According to the U.S. Attorney’s Office, if the returns were accepted, Phipps would have received a fraudulent tax refund of $164,951.
After all four attempts were rejected by the IRS, prosecutors say in September 2020, Phipps filed a fraudulent amended federal income tax return for the 2019 tax year, which was accepted by the IRS.
In the fraudulent report, Phipps falsely reported that Platinum Express Cleaning received gross receipts of $455,734 from Eastman Kodak Company, and had taxes withheld from such income of more than $355,000. This resulted in Phipps receiving a fraudulent tax refund and tax loss to the IRS of $186,570.
The Attorney’s Office adds Phipps used information from the false tax returns to submit three fraudulent loan applications under Platinum Express Cleaning’s name to the Small Business Administration in attempts to obtain COVID relief funding through the Economic Injury Disaster Loans (EIDL) program that was provided by the 2020 CARES act.
Phipps also falsely stated, according to prosecutors, on the EIDL loan applications that Platinum Express Cleaning had more than 120 employees which would have qualified his company for $573,200 on EIDL program loans. Prior to funding the EIDLs program loans, the SBA discovered the fraudulent loan applications, and did not fund the loans.
The charges carry a maximum penalty of 20 years in prison, and a $250,000 fine. Phipps’ sentencing is scheduled for August 20.