DOJ charges two men in alleged $52.7 million tax-credit scheme

The Justice Department announced on July 21, 2026, that two men were charged in an alleged multistate scheme involving more than $52.7 million in false COVID-19 tax-credit claims. Prosecutors say the Internal Revenue Service paid out more than $32.2 million before the alleged activity was investigated.

The case names Christopher Slater, a California man, and Mark Keagel of York, Pennsylvania. An indictment returned by a federal grand jury in Harrisburg, Pennsylvania, accuses Slater of helping recruit business owners, using their information to file false returns and laundering the proceeds. Prosecutors say at least 290 returns were filed for 35 businesses.

What the indictment alleges

The returns sought two pandemic-era credits: the Paid Sick and Family Leave Credit, which reimbursed qualifying wages paid to workers on COVID-related sick or family leave, and the Employee Retention Credit, which was designed to encourage businesses to keep employees on their payroll during the pandemic.

The Justice Department says the alleged claims totaled more than $52.7 million. That figure represents credits prosecutors say were sought, not confirmed losses. The department says the IRS paid more than $32.2 million.

The indictment also alleges that Keagel provided information from two defunct businesses to a co-conspirator. The Justice Department says false returns were filed for those businesses and that the IRS mailed approximately $3.6 million in Treasury checks to Keagel, who allegedly laundered the money.

Those are allegations, not findings of guilt. Slater and Keagel are presumed innocent unless proven guilty in court. If convicted, they could face prison terms on charges including conspiracy, mail fraud, money laundering and theft of government property.

Why GAO is watching the program

The case arrives as federal watchdogs continue reviewing how the IRS administered the Employee Retention Credit. In a report published February 10, 2026, the Government Accountability Office said the IRS had processed nearly 5 million ERC claims as of June 2025 and provided about $283 billion to employers.

GAO did not conclude that every ERC claim was improper. It found that the agency was overwhelmed by a surge of claims and faced challenges created by complex eligibility rules, paper-based amended returns, limited data collection and weaknesses in risk management. The IRS imposed a processing moratorium in September 2023 to address improper claims, and IRS officials told GAO that most claims had been closed by December 31, 2025.

GAO also said the IRS did not complete an improper-payment estimate for the ERC as required by law. The watchdog made four recommendations, including estimating improper payments, modernizing amended-return processing, updating the public about remaining claims and adopting stronger emergency-program risk policies.

As of the GAO report’s public status page, the recommendation to update the public had been closed after an IRS update in June 2026. The other three recommendations remained open, with additional IRS responses expected in summer 2026.

What happens next

IRS Criminal Investigation is investigating the case, while Justice Department prosecutors are handling the charges. The court proceedings will determine whether the allegations can be proven.

For taxpayers and businesses, the broader accountability question is whether federal agencies can build stronger controls before another emergency tax-credit program is launched. GAO’s findings suggest that speed can help deliver relief, but incomplete eligibility data, manual processing and delayed risk estimates can make it harder to identify improper payments while money is still recoverable.

Sources

• U.S. Department of Justice indictment announcement
• Government Accountability Office report GAO-26-107456
• IRS Criminal Investigation