An East Bay man who once served as an Internal Revenue Service officer has been sentenced to a federal prison term for his role in a plot to fraudulently obtain more than $3 million in pandemic relief aid, according to authorities.
Frank Mosely, 58, of Oakland, along with his brother, Reginald Mosely, 60, of Sacramento, orchestrated the scheme, which saw them obtain Paycheck Protection Program loan funds by filing documents on behalf of shell companies they and four others falsely certified had 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 – along 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. In addition, the brothers pleaded guilty to one count of aiding and advising in the filing of 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 a year and a half, 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 money intended to help those who desperately needed it and used that money to enrich themselves,” U.S. Attorney Ismail Ramsey said in a statement. “That one of these defendants was a former IRS revenue officer makes their crime that much more concerning. These sentences should help rebuild some of the public trust eroded by the defendants’ greed.”
Frank Mosely, in addition to his stint with the IRS, worked as a tax enforcement officer in Oakland.
The brothers, Boren, Conway and Wilborn admitted that they used the 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 on behalf of Forward Thinking Investors Inc., an entity they controlled, the U.S. Attorney’s Office said. They received over $1 million in PPP funds, and Reginald Mosely thereafter recruited acquaintances who owned companies prior to the pandemic to follow suit.
Boren, Conway and Wilborn agreed to kick back at least 15% 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 the others in connection with their bogus PPP loan applications, the U.S. Attorney’s Office said.
In addition, Ellis admitted to obtaining nearly $300,000 in PPP funds and other relief aid in connection with an entity she lied about owning, according to authorities.
The PPP was administered by the Small Business Administration as part of the Coronavirus Aid, Relief and Economic, or CARES, Act. The federal law was enacted 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 qualified business expenses.
In addition to sentencing all six defendants to prison, a judge ordered each of them to serve three years of supervised release and to pay restitution in an amount to be set at a later date.
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