Gloucester County Man Pleads Guilty to Tax Fraud Scheme and Theft of Elderly Victim’s Bank Account Funds

NEWARK N.J. – A New Jersey man pleaded guilty to fraudulently seeking more than $1.4 million from the IRS by filing false tax returns claiming COVID-19-related employment tax credits, for laundering the proceeds from that scheme, and for stealing more than $180,000 from an elderly customer at the car dealership where he worked, U.S. Attorney Alina Habba announced.

James J. Mastrogiovanni, 44, of Washington Township, pleaded guilty to an information charging him with one count of conspiracy to defraud the United States, one count of mail fraud, one count of money laundering, and one count of access device fraud.  Sentencing is scheduled for November 6, 2025.

During the pandemic, Mastrogiovanni engaged in a scheme with Leon Haynes, a tax preparer, to exploit COVID-19 relief programs to line his own pockets.  From in or around March 2021 through in or around December 2022, Mastrogiovanni and Haynes prepared and filed with the IRS false and fraudulent Forms 941 on behalf of Mastrogiovanni, his family members, and others, claiming tax refunds intended to help struggling small businesses by reducing employment taxes owed.  All of the Forms 941 prepared in furtherance of the scheme were false and fraudulent because they listed employees and wages that, in fact, did not actually exist. Neither Mastrogiovanni nor any of his family members owned or operated a business, let alone had paid employees.  Mastrogiovanni claimed at least $1,443,409 in tax credits, and as a result of the scheme, the U.S. Treasury disbursed at least $545,692 to Mastrogiovanni and his family members.

Haynes has been charged separately in a 63-count indictment for allegedly preparing and submitting more than 1,600 false employment tax returns on behalf of himself and clients totaling more than $150 million. He also allegedly defrauded some of his own clients by using their identities to submit these applications without their permission or knowledge.  Trial is scheduled to begin on September 25, 2025 in that matter.  The charges and allegations against Haynes are merely accusations, and he is presumed innocent unless and until proven guilty.

 From on or about June 19, 2023 through on or about December 7, 2023, Mastrogiovanni engaged in a separate scheme to steal more than $180,000 from an 85-year old victim. The victim presented a check to Mastrogiovanni to purchase a vehicle at the car dealership where Mastrogiovanni worked.  Mastrogiovanni later used the routing and checking account numbers on the check to make unauthorized personal transactions from the account until the account was empty. 

The count of conspiracy to defraud the United States carries a maximum penalty of five years in prison and a $250,000 fine; the mail fraud count carries a maximum penalty of 20 years in prison and a $250,000 fine; and the money laundering and access device fraud counts each carry a maximum penalty of ten years in prison and a $250,000 fine.

U.S. Attorney Habba credited special agents of the IRS – Criminal Investigation, under the direction of Acting Special Agent in Charge Jenifer L. Piovesan; special agents of the Social Security Administration, Office of the Inspector General, under the direction Acting Special Agent in Charge Corwin Rattler; postal inspectors from the U.S. Postal Service, under the direction of Inspector in Charge Christopher Nielsen, Philadelphia Division; and officers of the Mahwah Police Department, under the direction of Chief Timothy O’Hara, with the investigation.

The government is represented by Assistant U.S. Attorneys Matthew Stark and Fatime Meka Cano of the Economic Crimes Unit in Newark.

The District of New Jersey COVID-19 Fraud Enforcement Strike Force is one of five strike forces established throughout the United States by the U.S. Department of Justice to investigate and prosecute COVID-19 fraud. The strike forces focus on large-scale, multi-state pandemic relief fraud perpetrated by criminal organizations and transnational actors. The strike forces are interagency law enforcement efforts, using prosecutor-led and data analyst-driven teams designed to identify and bring to justice those who stole pandemic relief funds. 

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

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Defense Counsel for Mastrogiovanni: Frank Agostino, Esq.