On February 2, 2022, in the Western District of Kentucky, Mandy Bauer pled guilty to nine counts of fraud related to the Families First Coronavirus Response Act (FFCRA) and Coronavirus Aid, Relief, and Economic Security (CARES) Act. The FFCRA established that eligible employers that retain their employees are allowed tax credits against applicable employment taxes. The CARES Act established several temporary programs to provide emergency financial assistance to address the Coronavirus Disease 2019 (COVID-19) pandemic.

According to the court documents, on or about and between April 2, 2020 through July 1, 2020, Bauer filed nine fraudulent applications for various forms of Federal funding through the FFCRA and CARES Act programs. Specifically, in May 2020, Bauer faxed an Internal Revenue Service (IRS) Form 7200, Advance Payment of Employer Credits Due to COVID-19, to the IRS, claiming that her business, Family Personal Sales, had 10 employees and $37,000 in quarterly wages. The business did not have any employees or wage expenses. Additionally, Bauer submitted fraudulent applications for CARES Act funding through the Paycheck Protection Program and Economic Injury Disaster Loans. In these applications, Bauer filed fraudulent IRS Form 941s, Employer’s Quarterly Federal Tax Return, claiming to have employees with wages; however, there were no Forms 941 on file with the IRS. In total, Bauer attempted to defraud the Federal Government of more than $230,000.

A sentencing hearing is scheduled for May 11, 2022, at which Bauer could face a maximum imprisonment of 180 years, a total fine of $2,250,000, and three years of supervised release.

Source:  The facts in this case narrative come from the following publicly available documents: W.D. Ky., Plea Agr., filed February 2, 2022; W.D. Ky., Information, filed January 18, 2022; W.D. Ky., DOJ Press Release, published February 4, 2022; and W.D. Ky., Order, filed February 2, 2022.