Former Bay Area IRS agent, five others charged in COVID fraud scheme

OAKLAND — A 58-year-old Oakland man and five others have been charged with various crimes related to a multimillion-dollar COVID-loan fraud scheme, a U.S. Justice Department spokesman said Wednesday.

At the center of the scheme, according to federal prosecutors, is former Internal Revenue Service agent Frank Mosley, who was also identified as a “current city of Oakland tax enforcement officer.”

According to charging documents, Mosley took advantage of the federal government’s COVID-era Payroll Protection Program by submitting fraudulent applications and then using the loan money for personal expenses and investments. Also charged were his brother, Reginald Mosley, 60, and friends Aaron Boren, 56, of Roseville, Scott Conway, 52, of Rocklin, and Marcus Wilborn, 50, of Elk Grove.

From July 2020 to September 2021, the group allegedly faked documents for four shell companies, asserting that each were businesses with between 19 to 49 employees with a monthly payroll between $150,000 to $430,000.

In addition, charging documents said the Mosley brothers’ August 2020 application for their shell company, Forward Thinking Investors, Inc., drew just over $1 million, leading Reginald Mosley to get Boren, Conway and Wilborn, who each owned companies before February 2020, to submit their own PPP loan applications.

When those loans were approved, the men used those funds for “significant personal expenses, personal credit cards, personal investments, and distributions to their family members,” the justice department said. In addition, the Mosley brothers allegedly demanded a 15-percent kickback of loan proceeds from the others by circulating a written-out contract via e-mail. They then filed fake payroll tax returns with the IRS to conceal receipt of those funds, authorities allege.

In all, the group received approximately $3 million, the justice department said.

A sixth person, Kenya Ellis, 55, of Los Angeles, worked with the Mosleys and others to submit faked PPP loans, drawing in nearly $300,000 by using the name of a company, Global Processor Inc. Although she made claims about the company’s payroll and employee numbers, Ellis “had no legitimate relationship with GPI and the true owner of GPI had no awareness of, nor involvement in, the preparation and submission of the loan applications,” according to newly filed federal case.