Independence, MO Man Sentenced for $1.4 Million COVID-19 Scheme

KANSAS CITY, Mo. - An Independence, Mo., man was sentenced in federal court today for filing a false claim as part of a scheme to fraudulently receive nearly $1.4 million in COVID-19 relief funds from the government.

Richard Dean Schiele, Jr., 51, was sentenced by U.S. Chief District Judge Beth Phillips to a year and a day imprisonment and ordered to pay $130,125.09 in restitution to the Internal Revenue Service.

The Coronavirus Aid, Relief, and Economic Security Act (“CARES” Act) provided for an Employee Retention Credit designed to encourage businesses to keep employees on their payroll. The Employee Retention Credit is available to eligible employers that paid qualified wages to some or all employees after March 12, 2020, and before Jan. 1, 2022.

In his guilty plea, Schiele admitted he filed nine Employer’s Quarterly Tax Return forms with the IRS on April 22, 2023, for a company he formed the same month called Schiele Family Own Distribution. The returns made a total of $1,392,716 in claims for COVID–19 pandemic era credits against the company’s ostensible employment taxes. In reality, Schiele admitted, the company did not have any employees in 2020 through 2022.

Based on these false claims, the IRS issued checks totaling $478,890 to Schiele. The Treasury Department recovered $348,764.91 from Schiele’s bank account. Under the terms of today’s sentence, Schiele must pay $130,125 in restitution to the IRS.

This case is being prosecuted by Assistant U.S. Attorney Paul S. Becker. It was investigated by IRS-Criminal Investigation.