NEWARK, N.J. – A Washington Township man pleaded guilty Thursday to a scheme that defrauded the IRS of over $1.4 million in COVID-19 tax credits and to stealing more than $180,000 from an 85-year-old customer at a car dealership where he was employed, federal authorities said.
James J. Mastrogiovanni, 44, entered his plea before U.S. District Court to conspiracy to defraud the United States, mail fraud, money laundering, and access device fraud. He is scheduled to be sentenced on Nov. 6.
Federal prosecutors said that between March 2021 and December 2022, Mastrogiovanni and co-conspirator Leon Haynes, a tax preparer, filed fraudulent IRS Forms 941 to claim pandemic-related employment tax credits. These returns falsely reported nonexistent employees and wages for Mastrogiovanni, his family, and others.
As a result of the scheme, the U.S. Treasury paid out at least $545,692 in refunds to Mastrogiovanni and his relatives. “Neither Mastrogiovanni nor any of his family members owned or operated a business, let alone had paid employees,” prosecutors stated.
Haynes, who is charged separately, faces a 63-count indictment for allegedly submitting over 1,600 false employment tax returns totaling more than $150 million. He is scheduled to stand trial on Sept. 25.
Second scheme targeted elderly victim
In an unrelated fraud, Mastrogiovanni was also charged with accessing an elderly customer’s bank account without authorization. Between June and December 2023, he used routing and account numbers from a check provided by the 85-year-old customer—who was attempting to buy a vehicle—to make personal withdrawals until the account was emptied, prosecutors said.
The fraud and identity theft were uncovered through a multi-agency investigation led by the IRS-Criminal Investigation Division and the Social Security Administration’s Office of the Inspector General. Additional support came from the U.S. Postal Inspection Service and Mahwah Police Department.
The four charges carry a combined maximum penalty of 45 years in prison and fines totaling up to $1 million. Mastrogiovanni remains free on bond pending sentencing.
A New Jersey man faces decades in prison after pleading guilty to federal tax fraud and exploiting an elderly car buyer’s bank account.
