PHILADELPHIA, PA — A Chester County man has pleaded guilty to filing false federal income tax returns that concealed more than $1.9 million in taxable income over two years, while also obtaining approximately $220,000 in fraudulent pandemic relief loans, federal prosecutors announced this week.
Kelong Han, 43, of Paoli, entered his guilty plea before U.S. District Judge Kelley Brisbon Hodge to two counts of filing a false tax return, according to U.S. Attorney David Metcalf.
Under his plea agreement, Han will pay $1,723,658 in restitution. He faces a maximum possible sentence of six years in federal prison and a $500,000 fine when sentenced March 31, 2027.
Federal court filings show that Han submitted false individual income tax returns for 2020 and 2022, using fictitious businesses and fabricated wage payments to family members to misrepresent his taxable income.
For the 2020 tax year, Han reported taxable income of $9,531, although his actual taxable income was approximately $1,028,524. The difference exceeded $1 million.
In 2022, he reported $115,053 in taxable income despite having approximately $1,002,173 in actual taxable income, understating the amount by more than $887,000.
According to prosecutors, Han created two businesses that did not conduct revenue-generating operations and submitted Schedule C forms associated with those entities.
He falsely represented that his wife and young children worked for the businesses and received wages. Federal authorities determined that the family members had not received those payments and that neither business generated revenue.
The fictitious companies were also used to obtain federal pandemic assistance.
Prosecutors stated that Han submitted fraudulent applications for Paycheck Protection Program loans through the businesses and received approximately $220,000.
The Paycheck Protection Program was established to provide financial assistance to qualifying businesses during the COVID-19 pandemic.
Han was charged by criminal information in September and waived prosecution by grand jury indictment as part of the proceedings leading to his guilty plea.
The case was investigated by IRS Criminal Investigation and is being prosecuted by Assistant U.S. Attorney Eric D. Gill.
The prosecution comes amid a broader federal initiative targeting financial fraud. The Justice Department established its National Fraud Enforcement Division on April 7 to investigate and prosecute fraud involving federal programs and other financial misconduct.
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