ATLANTA — Tiyari Collins and Farah Collins, husband and wife, have pleaded guilty to defrauding the U.S. Small Business Administration by obtaining approximately $1.9 million in fraudulent loans from the Paycheck Protection Program and Economic Impact Disaster Loan program. Tiyari Collins, who owned and operated Collins Financial Services Group, a tax-preparation business based in metro Atlanta, also pleaded guilty to filing thousands of fraudulent tax returns resulting in a loss of at least $3.8 million to the IRS.
“The fraud here is outrageous,” said U.S. Attorney Kurt R. Erskine. “Tiyrai Collins defrauded the federal government amid a historic pandemic. It is unconscionable that he and his wife stole from government programs designed to support small businesses and their employees struggling as result of COVD-19 pandemic.”
According to U.S. Attorney Erskine, the charges and other information presented in court: The Coronavirus Aid, Relief, and Economic Security Act (“CARES”) is a federal law enacted on March 29, 2020. It is designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief providedby the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding. Additional funding was authorized by Congress in December 2020.
Tiyari Collins submitted applications for six fraudulent PPP loans and five fraudulent EIDL loans between approximately May 1, 2020 and June 30, 2020, totaling more than $1.9 million. Farah Collins was involved in submitting four of these fraudulent applications and received approximately $365,000 in the fraudulently distributed PPP and EIDL funds.
“The Collins family greedily lined their pockets with stolen government funds intended to provide relief to small businesses and employees during the COVID-19 pandemic,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “Their actions affect every tax paying citizen, in particular those who need help most. The FBI will make every effort to ensure federal funds are used as intended.”
In the fraudulent PPP and EIDL loan applications, the Collinses falsely represented, among other things, the company’s average monthly payrolls, the number of employees working for the relevant company, and the company’s revenues. The Collinses also submitted false tax returns in connection with several of these applications. Tiyari Collins paid another individual to prepare the fraudulent payroll reports that were submitted as part of the applications. For example, Tiyari Collins asked this individual to prepare a fraudulent payroll report showing total yearly wages to be approximately $850,000 for Collins Financial Services Group, LLC and to make up employees if necessary.
The Collinses owned or controlled the following entities that sought these fraudulent PPP and EIDL loans:
- CFSG
- Collins Investment Services Group, LLC
- Collins Platinum Car Services, LLC
- Fab Financial Business Solutions
- Tax Dragon Professional Network LLC
- T&F Investment Group
- Tiyari Collins Agency, LLC
Court documents show that the Collinses used the fraudulently obtained funds for unauthorized expenditures, including spending hundreds of thousands of dollars on luxury goods, personal credit card bills, and office furnishings.
After the fraud was discovered, federal agents were able to seize approximately $588,900 of the fraudulent proceeds.
Separately, Tiyari Collins, through his tax preparation business, CFSG, is believed to have filed and caused to be filed thousands of fraudulent federal tax returns between approximately January 2015 and April 2020, resulting in over $3.8 million in losses to the IRS.
According to prosecutors, Tiyari Collins inflated the refunds for his clients by, among other ways, fraudulently claiming they qualified for certain Form 3800 BusinessCredits and by filing fraudulent Schedule Cs to reduce his clients’ taxable income. CFSG’s clients never authorized Tiyari Collins to include this materially false information in their federal tax returns.
Agents from the Internal Revenue Service Criminal Investigation were able to detect and confirm this massive tax fraud, in part, with information provided by the IRS’s Scheme Detection Center, which had identified a pattern of suspicious returns that were connected to Tiyari Collins and his tax preparation businesses, by conducting an undercover operation, and with information obtained as a result of executing a federal search warrant at CFSG’s place of business in June 2020.
Tiyari Collins pleaded guilty to one count of conspiracy to commit wire fraud and one count of aiding and assisting in the preparation of a false tax return. Farah Collins pleaded guilty to one count of conspiracy to commit wire fraud.
Sentencing for Tiyari Collins, 38, and Farah Collins, 41, both of Atlanta, Georgia, is scheduled for March 15, 2022, at 9:30 a.m. and 11:30 a.m., respectively, before U.S. District Judge William M. Ray II
This case is being investigated by the Internal Revenue Service Criminal Investigation and Federal Bureau of Investigation.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
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