Fraud Protection for Pennsylvania Tax Credit Programs - Grand Jury Recommendations
December 17, 2019 03:07 PM to All Senate Members
Circulated By
Senator John Blake
D Senate District 22
Along With
Sen. Art Haywood
D Senate District 4
Memo
As you may be aware, following an 18-month probe by the 42nd Statewide Investigating Grand Jury, a husband and wife team, “Christopher” Wing-Tat Chiu and Ivy Li, created 20 fake companies between 2012 and 2017 and used them to apply for Research & Development (R&D) tax credits and Keystone Innovation Zone (KIZ) tax credits 89 times.
Over this period, they submitted 62 Research & Development (R&D) tax credit applications and 27 Keystone Innovation Zone (KIZ) tax credit applications wrought with false information. Though the use of fake Social Security Numbers, fake telephone numbers, and fictitious addresses, they were awarded $10.6 million worth of credits from Pennsylvania tax credit programs. A substantial amount of tax credits obtained by fraud were subsequently wired to their bank accounts overseas.
The statewide grand jury’s investigation examined the pair’s alleged illegal activity across Allegheny, Chester, Dauphin, Delaware, Philadelphia and Lancaster counties.
In the near future, we will be introducing legislation to enact the recommendations contained in a Grand Jury Report. These reforms and stronger controls to will aid in thwarting fraud in the sale of Pennsylvania tax credits. Among changes the grand jury advocated be made to the programs:
• Requiring independent audits to receive KIZ or R&D tax credits.
• Interviewing applicants face to face and require photo identification, receipts, account statements and financial records.
• Strengthening the R&D and KIZ legislation to bolster the review process by state agencies.
• Requiring local “KIZ coordinators” to obtain appropriate training in the roles and requiring them to conducting site visits for each applicant prior to approval to ensure that applicants are properly operating.
• Requiring tax credit brokers get licensed by Pennsylvania authorities.
• Requiring annual proof be submitted by applicants of how tax credits were used and if they were sold.
Please join us in cosponsoring this legislation aimed at protecting Pennsylvania taxpayers.
Over this period, they submitted 62 Research & Development (R&D) tax credit applications and 27 Keystone Innovation Zone (KIZ) tax credit applications wrought with false information. Though the use of fake Social Security Numbers, fake telephone numbers, and fictitious addresses, they were awarded $10.6 million worth of credits from Pennsylvania tax credit programs. A substantial amount of tax credits obtained by fraud were subsequently wired to their bank accounts overseas.
The statewide grand jury’s investigation examined the pair’s alleged illegal activity across Allegheny, Chester, Dauphin, Delaware, Philadelphia and Lancaster counties.
In the near future, we will be introducing legislation to enact the recommendations contained in a Grand Jury Report. These reforms and stronger controls to will aid in thwarting fraud in the sale of Pennsylvania tax credits. Among changes the grand jury advocated be made to the programs:
• Requiring independent audits to receive KIZ or R&D tax credits.
• Interviewing applicants face to face and require photo identification, receipts, account statements and financial records.
• Strengthening the R&D and KIZ legislation to bolster the review process by state agencies.
• Requiring local “KIZ coordinators” to obtain appropriate training in the roles and requiring them to conducting site visits for each applicant prior to approval to ensure that applicants are properly operating.
• Requiring tax credit brokers get licensed by Pennsylvania authorities.
• Requiring annual proof be submitted by applicants of how tax credits were used and if they were sold.
Please join us in cosponsoring this legislation aimed at protecting Pennsylvania taxpayers.
Legislation
Document - Introduced as SB 1326
Last updated on September 14, 2020 03:42 PM
Fraud Protection for Pennsylvania Tax Credit Programs - Grand Jury Recommendations
December 17, 2019 03:07 PM to All Senate Members
Circulated By
BLAKE and HAYWOOD
Memo
As you may be aware, following an 18-month probe by the 42nd Statewide Investigating Grand Jury, a husband and wife team, “Christopher” Wing-Tat Chiu and Ivy Li, created 20 fake companies between 2012 and 2017 and used them to apply for Research & Development (R&D) tax credits and Keystone Innovation Zone (KIZ) tax credits 89 times.
Over this period, they submitted 62 Research & Development (R&D) tax credit applications and 27 Keystone Innovation Zone (KIZ) tax credit applications wrought with false information. Though the use of fake Social Security Numbers, fake telephone numbers, and fictitious addresses, they were awarded $10.6 million worth of credits from Pennsylvania tax credit programs. A substantial amount of tax credits obtained by fraud were subsequently wired to their bank accounts overseas.
The statewide grand jury’s investigation examined the pair’s alleged illegal activity across Allegheny, Chester, Dauphin, Delaware, Philadelphia and Lancaster counties.
In the near future, we will be introducing legislation to enact the recommendations contained in a Grand Jury Report. These reforms and stronger controls to will aid in thwarting fraud in the sale of Pennsylvania tax credits. Among changes the grand jury advocated be made to the programs:
• Requiring independent audits to receive KIZ or R&D tax credits.
• Interviewing applicants face to face and require photo identification, receipts, account statements and financial records.
• Strengthening the R&D and KIZ legislation to bolster the review process by state agencies.
• Requiring local “KIZ coordinators” to obtain appropriate training in the roles and requiring them to conducting site visits for each applicant prior to approval to ensure that applicants are properly operating.
• Requiring tax credit brokers get licensed by Pennsylvania authorities.
• Requiring annual proof be submitted by applicants of how tax credits were used and if they were sold.
Please join us in cosponsoring this legislation aimed at protecting Pennsylvania taxpayers.
Over this period, they submitted 62 Research & Development (R&D) tax credit applications and 27 Keystone Innovation Zone (KIZ) tax credit applications wrought with false information. Though the use of fake Social Security Numbers, fake telephone numbers, and fictitious addresses, they were awarded $10.6 million worth of credits from Pennsylvania tax credit programs. A substantial amount of tax credits obtained by fraud were subsequently wired to their bank accounts overseas.
The statewide grand jury’s investigation examined the pair’s alleged illegal activity across Allegheny, Chester, Dauphin, Delaware, Philadelphia and Lancaster counties.
In the near future, we will be introducing legislation to enact the recommendations contained in a Grand Jury Report. These reforms and stronger controls to will aid in thwarting fraud in the sale of Pennsylvania tax credits. Among changes the grand jury advocated be made to the programs:
• Requiring independent audits to receive KIZ or R&D tax credits.
• Interviewing applicants face to face and require photo identification, receipts, account statements and financial records.
• Strengthening the R&D and KIZ legislation to bolster the review process by state agencies.
• Requiring local “KIZ coordinators” to obtain appropriate training in the roles and requiring them to conducting site visits for each applicant prior to approval to ensure that applicants are properly operating.
• Requiring tax credit brokers get licensed by Pennsylvania authorities.
• Requiring annual proof be submitted by applicants of how tax credits were used and if they were sold.
Please join us in cosponsoring this legislation aimed at protecting Pennsylvania taxpayers.
Document
Introduced as SB 1326
Last Updated
September 14, 2020 03:42 PM
Generated 03/23/2025 02:49 PM