Georgia Men Guilty in New York State Film Tax Credit Fraud Scheme

ALBANY, Ga. - Two Southwest Georgia men who used online tax preparation software to file state of New York tax returns falsely claiming film industry credits for people who never worked in New York or in film and television are facing several decades in prison for their crimes.

"We are committed to protecting taxpayers by ensuring that tax credits designed to create and maintain jobs are used lawfully," said U.S. Attorney William R. "Will" Keyes. "The Department of Justice's National Fraud Enforcement Division remains focused on combating fraud. We will continue working closely with our law enforcement partners to prevent financial crimes and uphold the public's trust."

"Financial fraud is far from a victimless crime. Schemes like this divert public resources, exploit stolen identities, and erode confidence in programs designed to benefit legitimate businesses and workers," said Thomas Clark, Supervisory Senior Resident Agent of FBI Atlanta's Valdosta office. "The FBI and our partners will continue to aggressively investigate those who believe they can profit through deception and hold them accountable for their actions."

"Let this serve as a warning to any taxpayers considering lining their pockets for personal gain. The defendants repeatedly submitted fraudulent tax records attempting to steal funds that drive New York State's creative economy," said Amanda Hiller, New York State Department of Taxation and Finance Acting Commissioner. "I commend the dedicated work of our NYS Tax Investigators and thank United States Attorney Keyes and his office for their partnership and diligent efforts in bringing tax criminals to justice."

Ryan Rugg, 28, of Tifton, pleaded guilty to one count of conspiracy to commit wire fraud on July 22. Rugg faces a maximum of 30 years in prison to be followed by five years of supervised release and a $250,000 fine. Rugg's sentencing is scheduled for Oct. 29 at 3:00 p.m. in Albany.

Co-defendant, Joshua Jordan, 37, of Tifton, previously pleaded guilty to one count of conspiracy to commit wire fraud and one count of aggravated identity theft on March 26. Jordan faces a maximum of 30 years in prison and a $250,000 fine for wire fraud and a maximum of two years in prison to be served consecutively and a $250,000 fine for aggravated identity theft. In addition, Jordan faces up to five years of supervised release. Jordan's sentencing is scheduled for Sept. 3 at 3:00 p.m. in Albany.

U.S. District Judge W. Louis Sands is presiding over the case. There is no parole in the federal system.

According to court documents and statements referenced in court, a New York State Department of Taxation and Finance investigator began looking into a potential fraud scheme on June 24, 2023, involving the submission of 22 New York State tax documents by 18 Georgia residents. The returns were flagged for several factors, including out-of-state residency, first-time filer status, and other indicators of fraud.

A deep review of these records revealed that Jordan and Rugg committed a tax scheme to obtain

fraudulent New York state tax refunds by falsely claiming film production and post-production tax credits. Investigators discovered that Jordan created an account in February 2023 with a tax preparation software company called Online Taxes, based in Missouri, which provides federal and state online tax preparation and electronic filing for individual taxpayers.

Jordan and Rugg admitted to filing, or helping others file, New York film tax credits for individuals who had never worked in New York and had not produced or incurred any cost producing film or television shows in New York. For example, Jordan admitted to filing a fraudulent tax return for S.B. on April 18, 2023, using the Online Taxes software. The preparation and submission of this document required Jordan to give S.B.'s Social Security number and other identifying information on the required forms without lawful authority to do so. On May 4, 2023, Jordan called the New York tax department line, pretending to be S.B. and requesting information on his fraudulent tax return. The fraudulent return filed on S.B.'s behalf yielded a return of $49,772 paid out by the state of New York.

In total, Jordan and Rugg fraudulently obtained or attempted to obtain more than $550,000 as part of this conspiracy.

On April 7, the Department of Justice announced the creation of the National Fraud Enforcement Division. The Fraud Division is laser-focused on investigating and prosecuting those who commit fraud against the American people. The Department's work to combat fraud supports President Trump's Task Force to Eliminate Fraud, a whole-of-government effort chaired by Vice President J.D. Vance to eliminate fraud, waste, and abuse within Federal benefit programs.

The FBI Atlanta's Valdosta Resident Agency and the New York State Department of Taxation and Finance investigated the case.

Assistant U.S. Attorney Monica Daniels is prosecuting the case for the Government.