GEORGIA — Two Georgia residents pled guilty in federal court to using online tax software to falsely claim film tax credits in the State of New York.
The scheme involved Ryan Rugg and Joshua Jordan, both of Tifton, filing 22 fraudulent tax returns using online software, attempting to steal over $550,000 by falsely claiming film industry credits for individuals who did not qualify.
Federal officials said the fraudulent claims were submitted for people who never worked in New York or in film and television, exploiting tax credits designed to incentivize job creation within the state’s creative economy.
Rugg pleaded guilty to one count of conspiracy to commit wire fraud and Jordan pleaded guilty to one count of conspiracy to commit wire fraud and one count of aggravated identity theft.
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He also faces up to five years of supervised release. U.S. District Judge W. Louis Sands is presiding over the case and there is no parole in the federal system.
The investigation into the potential fraud scheme started on June 24, 2023, when a New York State Department of Taxation and Finance investigator began checking tax documents allegedly filed by Georgians. It involved the submission of 22 New York State tax documents by 18 Georgia residents. The returns were flagged due to several factors, including out-of-state residency, first-time filer status and other indicators of fraud.
The investigation into the potential fraud scheme began on June 24, 2023, by a New York State Department of Taxation and Finance investigator. It involved the submission of 22 New York State tax documents by 18 Georgia residents.
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The returns were flagged due to several factors, including out-of-state residency, first-time filer status and other indicators of fraud.
Investigators first discovered Jordan created an account in February 2023 with Online Taxes, a Missouri-based company providing federal and state online tax preparation.
“We are committed to protecting taxpayers by ensuring that tax credits designed to create and maintain jobs are used lawfully,” said U.S. Attorney William R. “Will” Keyes. “The Department of Justice’s National Fraud Enforcement Division remains focused on combating fraud Keyes said We will continue working closely with our law enforcement partners to prevent financial crimes and uphold the public’s trust.”
Jordan and Rugg both admitted to filing or helping others file film tax credits for individuals who had not worked in New York and had not incurred any costs producing film or television shows.
In one instance, the Justice Department said Jordan admitted to filing a fraudulent tax return for an individual identified as S.B. on April 18, 2023, using S.B.’s Social Security number without lawful authority. This specific fraudulent return yielded $49,772 from New York State.
“Financial fraud is far from a victimless crime. Schemes like this divert public resources, exploit stolen identities and erode confidence in programs designed to benefit legitimate businesses and workers,” Thomas Clark, Supervisory Senior Resident Agent of FBI Atlanta’s Valdosta office, said. “The FBI and our partners will continue to aggressively investigate those who believe they can profit through deception and hold them accountable for their actions.”
On May 4, 2023, Jordan called the New York tax department pretending to be S.B. to request information on the fraudulent return, USDOJ said.
Amanda Hiller, N.Y. State Department of Taxation and Finance Acting Commissioner, issued a warning to potential offenders and commended investigators for their work to bring Rugg and Jordan to justice.
“Let this serve as a warning to any taxpayers considering lining their pockets for personal gain,” Hiller said. “The defendants repeatedly submitted fraudulent tax records attempting to steal funds that drive New York State’s creative economy.” Hiller commended the work of NYS Tax Investigators and thanked United States Attorney Keyes and his office for their partnership.
Rugg faces a maximum of 30 years in prison, to be followed by five years of supervised release and a $250,000 fine.
Jordan faces a maximum of 30 years in prison and a $250,000 fine for wire fraud, in addition to a maximum of two years in prison to be served consecutively and a $250,000 fine for aggravated identity theft.
Jordan’s sentencing is scheduled for Sept. 3 at 3 p.m. in Albany. while Rugg’s is scheduled for Oct. 29 at 3 p.m., also in Albany.
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