IRS Scam Featuring Fictional Beverly Hills Farm Ends in Prison Term
The Hollywood resident who fabricated a Beverly Hills-based farming enterprise to fraudulently obtain COVID-19 tax credits was sentenced Monday to nearly five years in federal prison.
Kevin J. Gregory, 57, was handed a 57-month sentence by U.S. District Judge Josephine L. Staton and ordered to repay $2.77 million in restitution to the Internal Revenue Service. The prison term follows Gregory’s January guilty plea to a single count of filing false claims with the IRS.
Federal prosecutors said Gregory exploited emergency pandemic-era relief programs by falsely claiming that his fictitious company, Elijah USA Farm Holdings, qualified for over $65 million in tax refunds between November 2020 and April 2022. The purported business, supposedly headquartered in Beverly Hills and involved in farming and transportation, never existed and had no employees, authorities said.
Court records show that Gregory submitted multiple fraudulent tax returns seeking employment-related COVID relief, including the employee retention credit and the paid sick and family leave credit. These programs were created by Congress to help businesses retain workers and cover COVID-related leave during the pandemic.
Among the false filings, Gregory submitted a quarterly return in January 2022 claiming his non-existent company had 33 employees, paid $1.6 million in wages, deposited $18 million in federal taxes, and was entitled to nearly $6.5 million in COVID-related credits. In truth, the business operated on paper only and had no payroll activity or tax deposits, according to prosecutors.
The IRS ultimately issued more than $2.7 million in refunds, which Gregory used for personal expenditures.
Gregory has been in federal custody since his arrest in May 2023. The case was investigated by IRS Criminal Investigation and prosecuted by Assistant U.S. Attorney Kristen A. Williams of the Major Frauds Section.
The sentence is part of a broader effort by the Justice Department’s COVID-19 Fraud Enforcement Task Force, which was established in May 2021 to coordinate investigations and crack down on those who exploited pandemic relief programs.
Anyone with information regarding potential COVID-19 fraud can contact the Department of Justice’s National Center for Disaster Fraud at (866) 720-5721 or submit tips online.
