Former IRS officer and his brother sentenced for scamming over $3M in loan relief funds

(KRON) — A former IRS officer, Frank Mosley, 58, of Oakland, and his brother Reginald Mosley, 60, of Sacramento, have been sentenced to 12 to 30 months in prison for obtaining over $3 million in false COVID-19 relief funds, U.S. District Attorney Ismail J. Ramsey said on Friday.

According to Ramsey, the brothers gained the funds by filing false loan applications, claiming false numbers under their companies or using the name of a company that wasn't theirs altogether, prosecutors said.

As part of their scheme, four other defendants – Marcus Wilborn, 50, of Elk Grove; Aaron Boren, 56, of Roseville; Scott Conway, 52, of Rocklin; and Kenya Ellis, 55, of Los Angeles – have been charged for aiding the Mosley brothers by using their company names for the loan application, with the Mosley brothers gaining a 15% share of whatever financial aid the con-conspirators received, prosecutors said.

"At the height of a global pandemic wreaking havoc on American businesses and families, these defendants fraudulently obtained millions of dollars in aid money intended to help those who desperately needed it and used that money to enrich themselves," Ramsey said.

According to the defendant's plea agreement, Frank Mosley was a tax enforcement officer for Oakland and a former IRS revenue officer who conspired with others between July 2020 and September 2021 to submit fraudulent PPP loan applications, more commonly known as pandemic loan relief funds.

In August 2020, the Mosley brothers filed a fraudulent loan application on behalf of Forward Thinking Investors Inc., a company they controlled, by inflating employee numbers and payroll costs. According to plea agreements, the Mosley brothers gained over $1 million in loan relief funds.

After gaining the $1 million on behalf of their own company, the Mosley brothers then contacted Wilborn, Boren, and Conway, who owned their own companies, to submit additional fraudulent loan applications.

In addition to aiding the three in filing PPP applications, the Mosley brothers also drafted a virtual contract over email agreeing for the co-conspirators to pay the brothers 15% of whatever financial relief they received, prosecutors said.

In her plea agreement, Ellis admitted she aided in advising the Mosley brothers and others regarding their fraudulent PPP loan applications. She also admitted that, in 2020 and 2021, she obtained almost $300,000 by applying with Global Processor, Inc., a company that she had no affiliation with.

Upon getting informed, the owner of Global Processor Inc. claimed he was unaware that Ellis applied for relief funds under his company name, prosecutors said.

All six defendants pleaded guilty to one count of conspiracy to commit bank fraud. The Mosley brothers, both of whom were sentenced to 30 months in prison, also pleaded guilty to one count of aiding and advising in the filing of false tax returns. Wilborn was sentenced to 18 months in prison, and Boren and Conway were each sentenced to 12 months and one day in prison for their roles in the scheme. The sixth defendant, Ellis, pleaded guilty to one count of bank fraud and was sentenced to 12 months in prison.

All six defendants were originally charged in May 2023.

"Frank and Reginald Mosley, along with their co-conspirators, ran an abhorrent scheme that fraudulently obtained over $3 million of funds designed to help struggling businesses in the wake of a global pandemic. Even worse, Frank Mosley, a former IRS revenue agent, exploited his expertise to help cover up the scheme," said IRS-CI Acting Special Agent in Charge Michael Mosley. "No one is above the law. Fostering confidence in our financial system and public institutions is at the core of IRS Criminal Investigation's mission."

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