LA man sentenced to prison after fraud that used ‘Montana-registered shell companies’

A Los Angeles man who used “Montana-registered shell companies” in a multimillion dollar fraud was sentenced this week to 63 months in federal prison and ordered to pay $1.9 million in restitution, according to the IRS Criminal Investigation division.

Lamont McCarthy pleaded guilty in July to wire fraud and also will serve three years of supervised release in addition to prison time, a news release said.

IRS Criminal Investigation, the law enforcement arm of the IRS, described the scheme in its news release, citing court records from the Central District of California:

McCarthy purchased and controlled shell corporations listed as Cal Construction and India Towing. The companies “existed only on paper” and didn’t have legitimate operations.

“He then used these companies to submit fraudulent Paycheck Protection Program (PPP) loan applications, falsely claiming they had substantial revenue, active operations, 15 employees, and significant payroll expenses,” the news release said.

But it said the companies didn’t have any employees, and they didn’t generate any revenue.

In an email, IRS Criminal Investigation public affairs officer Joe Simms said McCarthy applied for those loans in 2021.

“Once approved, more than $1.9 million in PPP funds were wired to accounts McCarthy controlled,” the news release said. “Instead of using the money for payroll or other authorized business expenses, McCarthy diverted the funds for his personal use.”

Simms said the investigation was launched in 2023 and a criminal complaint was filed in June 2026.

In a statement, Scott Brown, acting special agent in charge of the IRS Criminal Investigations field office in Phoenix, said the case demonstrates the IRS Criminal Investigation’s commitment to ensuring those who abuse pandemic relief programs are held accountable.

“While Montana business owners and families were struggling during the Covid pandemic, McCarthy was scheming to defraud the government relief program for personal gain,” Brown said in a statement.

It wasn’t clear whether McCarthy had a connection to Montana.

IRS Criminal Investigation conducted the investigation with the U.S. Small Business Administration, the news release said.

It said U.S. District Judge Percy Anderson presided over the sentencing, and Assistant U.S. Attorney Monica Tait of California handled the prosecution.