Tennessee Man Admits to COVID-19 ERC Fraud & Money Laundering in $3.4 Million Scheme

A Tennessee man, Ryan Glidewell, has pleaded guilty to orchestrating a large-scale COVID-19 Employee Retention Credit (ERC) fraud scheme, in a case underscoring the persistent threat of financial crime during the pandemic and the government’s focus on enforcement.

According to court documents and statements, Glidewell conspired with others to exploit the pandemic relief framework by filing fraudulent tax returns on behalf of fictitious businesses. These entities had no legitimate operations or employees but were created solely to claim COVID-19-related employment tax credits, including the Employee Retention Credit and the paid Sick and Family Leave Credit.

As part of the scheme, Glidewell prepared and submitted numerous false returns that sought more than $3.4 million in refunds, resulting in the Internal Revenue Service (IRS) paying out approximately $1.8 million. The refunds were directed to addresses controlled by Glidewell and his co-conspirators, enabling them to launder the proceeds of this fraud.

Glidewell pleaded guilty to conspiring to commit wire and mail fraud, aiding and assisting in the preparation of a false tax return, and money laundering. His sentencing is scheduled for 12 November, where he faces up to 20 years’ imprisonment for the fraud conspiracy, 10 years for money laundering, and 3 years for aiding the preparation of a false return.

This case highlights the significant money laundering risks associated with pandemic-related fraud schemes, as illicit proceeds are channelled through layers of transactions to disguise their origin and facilitate their integration into the legitimate financial system. The investigation, led by IRS Criminal Investigation and the US Secret Service, reflects the government’s robust approach to detecting and prosecuting complex financial crime and reinforcing confidence in COVID-19 relief programmes.

As businesses and financial institutions continue to assess their anti-money laundering (AML) controls, this prosecution serves as a reminder of the importance of vigilant due diligence, especially where public funds or emergency relief programmes are involved.

For financial crime compliance professionals, this case underscores the necessity of screening for suspicious patterns in pandemic-related claims, identifying red flags indicative of fictitious entities, and ensuring effective reporting to law enforcement.

Read the press release here.