New Haven Man, 33, Pleads Guilty to Pandemic Relief Program Fraud Offense: US Attorney

NEW HAVEN, CT — A New Haven man, 33, waived his right to be indicted and pleaded guilty today in U.S. District Court to an offense stemming from a pandemic relief program fraud scheme, according to David X. Sullivan, United States Attorney for the District of Connecticut, and Thomas Demeo, Special Agent in Charge of IRS Criminal Investigation in New England.

Davante Mallard pleaded guilty to making false claims regarding IRS refunds in connection with pandemic relief program fraud, Sullivan said.

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According to court documents and statements made in court, Mallard owned Mallard Dynasty Realty Group (MDR Group), which provided real estate and property management services, the US Attorney said. "The business earned little to no income, had no employees, had not paid wages, and had not filed W-2 forms with the Internal Revenue Service," he noted.

In March 2020, Congress passed legislation that sought to mitigate the economic harm caused by the COVID-19 pandemic, Sullivan noted. Legislation included the CARES Act, which created employee retention credits intended to repay employers for certain costs and to retain employees during the pandemic. It allowed businesses to "recoup previously paid wages and certain health insurance costs, and the Families First Coronavirus Response Act, which created the sick and family leave credit (SFLC) that reimbursed small and mid-sized employers for the cost of providing paid sick and family leave wages to employees for leave related to COVID-19 during the pandemic."

Sullivan said in early 2022, people Mallard knew "instructed him to open an online account with a business that provided online tax preparation services."

Mallard gave them the account information and password, and then between April 2022 and February 2023, "the individuals accessed the account and prepared and filed with the IRS fraudulent Employer's Quarterly Federal Tax Returns (Forms 941) for MDR Group."

Sullivan said the forms "misrepresented the number of employees and total wages paid, and were used to apply for large ERC and SFLC refunds."

He added that when "contacted by the IRS to verify information about MDR Group, Mallard provided false information, including that his business had five employees."

Between August 2022 and March 2023, MDR Group received six IRS refund checks totaling $256,906, according to the Justice Department.

"Mallard kicked a portion of the refund monies back to the individuals who orchestrated the scheme," the federal prosecutor said.

Mallard pleaded guilty to making false claims regarding IRS refunds, an offense that carries a maximum term of imprisonment of five years, Sullivan said.

Mallard is out on a $50,000 bond pending sentencing, which is not scheduled, Sullivan said.