California tax preparer pleads guilty to $25M fraud, bogus COVID loans

A California tax preparer pleaded guilty to filing fraudulent federal income tax returns on behalf of clients and submitting false applications for COVID-19 pandemic relief loans, the Justice Department announced.

Kerwin Aldric Jordan, 71, of Castaic, California, and formerly of Pebble Beach, entered guilty pleas to four counts of aiding in the preparation of false federal income tax returns and one count of wire fraud, prosecutors said.

Jordan was the president of The Jordan Corporation, a tax preparation business, and also owned and operated a firm called Jordan and Jordan A Financial Conquest, according to his plea agreement. He held himself out to clients as a tax attorney and certified public accountant — credentials he did not actually hold, prosecutors said.

According to court documents, Jordan prepared federal returns that fraudulently reduced clients’ taxable income by falsely reporting that they operated one or more businesses. He then claimed losses for those fictitious enterprises to offset his clients’ actual income, prosecutors said.

In one example cited by prosecutors, Jordan reduced a married couple’s $2 million income by reporting more than $1 million in fraudulent expenses tied to non-existent businesses, eliminating additional taxes owed and generating a refund of nearly $25,000. The couple paid Jordan almost $28,000 for the work, according to the plea agreement.

Between 2018 and 2023, Jordan filed more than 1,370 federal tax returns reporting total business losses exceeding $73 million, prosecutors said. Prosecutors contend the returns resulted in more than $25 million in losses to the U.S. Treasury.

Jordan also submitted fraudulent applications for Paycheck Protection Program and Economic Injury Disaster Loan funds — two programs Congress created in March 2020 to help businesses survive the economic fallout of the COVID-19 pandemic, prosecutors said. Prosecutors also said Jordan used the loan proceeds for unauthorized purposes.

He falsely reported that his companies had employees when they had none, according to court documents.

Jordan received $188,667 in PPP funds and $276,600 in EIDL funds, the latter spread across three entities: Jordan and Jordan; Euphrates Wealth Asset Management, which he owned; and Lifestyles of the Rich in Faith Church, a non-profit organization of which he was the principal, prosecutors said.

U.S. District Judge Stephen V. Wilson for the Central District of California set an Oct. 5 sentencing hearing. Jordan faces a maximum sentence of 32 years in prison.