Former East Bay IRS officer and five others sentenced to prison for COVID-19 fraud scheme

Lina PortmanMay 30, 2024

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OAKLAND — An East Bay man who once served as an Internal Revenue Service officer has been sentenced to federal prison for his role in a conspiracy to fraudulently obtain more than $3 million in aid from pandemic emergency, according to authorities.

Frank Mosely, 58, of Oakland, and his brother, Reginald Mosely, 60, of Sacramento, orchestrated the scheme, which saw them obtain loan funds from the Paycheck Protection Program by filing documents with name of shell companies of which they and four others falsely certified owned dozens. of employees and hundreds of thousands of dollars in monthly payroll expenses, the U.S. Attorney's Office said in a news release.

The brothers – with Aaron Boren, 56, of Roseville; Scott Conway, 52, of Rocklin; and Marcus Wilborn, 50, of Elk Grove — pleaded guilty to one count of conspiracy to commit bank fraud, according to authorities. Additionally, the brothers pleaded guilty to one count of aiding and advising in filing false tax returns.

A sixth person – Kenya Ellis, 55, of Los Angeles – pleaded guilty to one count of bank fraud.

The brothers were sentenced to two and a half years in prison, Wilborn to one and a half years and Boren, Conway and Ellis to one year, the U.S. attorney's office said.

“At the height of a global pandemic wreaking havoc on American businesses and families, these defendants fraudulently obtained millions of dollars in aid intended to help those who desperately needed it and used the money to enrich themselves ” U.S. Attorney Ismail Ramsey said in a statement. statement. “The fact that one of these defendants is a former IRS revenue agent makes their crime even more concerning. These sentences should help restore some of the public trust eroded by the greed of the defendants.”

Frank Mosely, in addition to his time with the IRS, worked as a tax enforcement agent in Oakland.

Brothers Boren, Conway and Wilborn admitted to using PPP funds for personal expenses and investments and to pay credit card bills, according to authorities.

In August 2020, the brothers submitted a fraudulent loan application in the name of Forward Thinking Investors Inc., an entity they controlled, the U.S. Attorney's Office said. They received more than $1 million in PPP funds, and Reginald Mosely then recruited acquaintances who owned businesses before the pandemic to follow suit.

Boren, Conway and Wilborn agreed to return at least 15 percent of the funds they received to the brothers for their help in preparing the applications, according to authorities.

Ellis, for her part, admitted that she aided and advised the brothers and others in connection with their false PPP loan applications, the U.S. Attorney's Office said.

Additionally, Ellis admitted to obtaining nearly $300,000 in PPP funds and other emergency aid in connection with an entity whose ownership she lied about, according to authorities.

The PPP was administered by the Small Business Administration as part of the Coronavirus Aid, Relief, and Economy CARES Act. The federal law was signed into law in March 2020 to provide billions of dollars in emergency financial assistance to millions of Americans suffering from the economic effects of the pandemic.

The program provided forgivable loans to small businesses for job retention and other eligible business expenses.

In addition to sentencing the six defendants to prison, a judge ordered each of them to serve three years of supervised release and pay restitution, the amount of which will be determined later.