TUCSON, Ariz. — Roy Layne, 44, of St. David, Arizona, has been sentenced to four years in federal prison for orchestrating a scheme to defraud COVID-19 relief programs and the Internal Revenue Service, the U.S. Attorney’s Office for the District of Arizona announced Thursday.
U.S. District Judge John C. Hinderaker handed down the sentence on Tuesday. Layne will also serve three years of supervised release following his prison term and must pay $856,692.91 in restitution to the federal government.
According to court records, Layne pleaded guilty to two counts of wire fraud and one count of filing a false claim.
How Layne defrauded COVID-19 relief programs
In an effort to qualify for COVID relief loans, Layne fabricated the existence of multiple businesses. Prosecutors said he filed IRS paperwork, obtained a Tucson business license, opened bank accounts, and submitted fraudulent tax returns — all to make it appear as though he operated a legitimate wholesale business.
In April 2020, Layne claimed he ran a business with 17 employees and over $500,000 in annual revenue when applying for a U.S. Small Business Administration loan. A year later, he applied for a Paycheck Protection Program loan with even bolder claims — stating he had 31 employees and $1.2 million in revenue. These falsified applications led to Layne receiving over $300,000 in pandemic relief funds.
Additional tax fraud uncovered
Layne also stole the identities of other individuals to file fake tax returns. In total, he sought more than $7.4 million in fraudulent tax refunds and received over $590,000 from the IRS before being caught.
The case was investigated by IRS Criminal Investigation and the FBI. It was prosecuted by Trial Attorney Matthew R. Hoffman of the U.S. Department of Justice Tax Division and Assistant U.S. Attorney Mary Sue Feldmeier of the District of Arizona.
Layne’s sentencing is part of an ongoing federal effort to investigate and prosecute fraud involving COVID-19 relief funds.
