Georgia Man Pleads Guilty To Conspiring To Defraud The IRS And To Commit Wire Fraud Through The Operation Of Bogus Credit Repair Businesses
Jacksonville, Florida – United States Attorney Roger B. Handberg announces that Kevin Edward Hargrave (50, Locust Grove, Georgia), formerly known as Kevin Edward Wade, has pleaded guilty to conspiring to commit wire fraud and to defraud the United States for the purpose of impeding the lawful functions of the Internal Revenue Service. Hargrave faces a maximum penalty of five years in federal prison. A sentencing date has not yet been set.
According to the plea agreement, Hargrave controlled a number of companies, including WSA Optimization Firm, Inc., that purported to offer “credit repair services” to the public. Hargrave promoted these services through multiple company-specific websites, radio advertising, emails, text messages, and posts on YouTube.com and other social media sites. Among other things, these marketing campaigns promised to “erase bad credit” information from consumers’ credit reports within 90 days – “guaranteed.” Notwithstanding these promises, multiple customers reported to federal investigators that they paid for credit repair services, saw no such results, and were denied refunds. When an undercover federal agent called to inquire about these credit repair services, he was told that WSA Optimization used “federal laws to remove all negative derogatory items off your credit.” Further, he was told “we are able to remove those items off your credit without you paying [creditors] back.” A company representative also claimed that WSA Optimization employed a team of 5 attorneys and 23 paralegals who worked to remove negative credit information from credit reports. In reality, WSA Optimization did not employ a team of attorneys or paralegals. Instead, supposedly to improve its customers’ credit scores, company representatives would send form letters to each credit reporting agency and falsely claim that all negative credit information on the customers’ credit reports was the product of identity theft or fraud. These letters, which did not disclose that they were mass produced by WSA Optimization, were sent in envelopes listing a fictional return address.
An analysis of bank records establishes that more than $8 million in deposits were made into the business bank accounts controlled by Hargrave and a family member, and that significant funds were diverted from those accounts to pay for luxury vehicles, mortgage payments on their residence, personal credit cards, jewelry, items at retail stores, utilities, restaurants, and other living expenses.
For example, business funds were used to make more than $128,000 in mortgage payments on Hargrave’s residence in Fernandina Beach, which he sold in 2022 for $870,000. Similarly, approximately $300,000 in business funds were used to make down payments and monthly financing payments on automobiles owned by Hargrave and a family member, including a Lamborghini Gallardo, a Rolls Royce Wraith, a Porsche Boxster, a Range Rover, a Ford F-150, and two Mercedes Benz vehicles.
An analysis of Hargrave’s real and personal property, certain business records, credit card statements, and the bank records collectively demonstrate that his joint tax returns for tax years 2016 through 2019 underreported taxable income and improperly claimed certain business expenses. A financial investigator with the IRS estimates that since 2015, by underreporting his and a family member’s tax liability, Hargrave has caused the United States to lose more than $250,000 in tax revenue.
As part of his plea agreement, Hargrave agreed to pay restitution to both the IRS for the tax loss that he caused and to victims of the credit repair services/wire fraud scheme that he operated. He also agreed to forfeit to the United States $1.5 million, as proceeds of wire fraud conspiracy.
This case was investigated by the Internal Revenue Service – Criminal Investigation and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Michael J. Coolican. Assistant United States Attorney Mai Tran is handling the forfeiture of assets.