Lamont McCarthy
Introduction
Lamont McCarthy is a Los Angeles man who was sentenced to 63 months in federal prison for orchestrating a multi-million-dollar Paycheck Protection Program fraud scheme that ran through shell companies registered in Montana. According to Internal Revenue Service Criminal Investigation, McCarthy pleaded guilty in July 2026 to one count of wire fraud and was sentenced on federal charges filed in the Central District of California. In addition to the five-year-plus prison term, he was ordered to pay $1,927,935 in restitution and to serve three years of supervised release. His case became part of the larger reckoning over pandemic-relief fraud, in which fraudsters registered paper corporations in states with business-friendly filing systems and used them to harvest loans meant for genuinely struggling small businesses .
Background Information
The scheme at the center of McCarthy’s case relied on two companies: Cal Construction and India Towing. Court documents filed in the Central District of California describe both as Montana-registered shell corporations that “existed only on paper and conducted no legitimate business operations.” Montana has become a favored registration state for shell companies because of its low filing costs and minimal disclosure requirements, and federal prosecutors have repeatedly encountered pandemic-relief fraud built on shells filed there. McCarthy purchased and controlled both entities, and neither had any employees nor generated any income — facts that made their loan applications fraudulent on their face. Beyond his prosecution, no public biography of McCarthy — profession, age, or history — has been reported in the available record .
The Controversy or Incident That Led to Their Cancellation
Convicted by plea. McCarthy pleaded guilty to one count of wire fraud in July 2026, admitting the scheme described in court documents. The plea is a court-record conviction; the sentencing facts below were announced by IRS Criminal Investigation on October 20, 2026.
Using Cal Construction and India Towing, McCarthy submitted fraudulent PPP loan applications that falsely claimed the companies had substantial revenue, active operations, fifteen employees, and significant payroll expenses. In reality, prosecutors said, neither company had a single employee or any income at all. The applications were approved, and more than $1.9 million in PPP funds was wired into accounts McCarthy controlled. Rather than spending the money on payroll or any other authorized business expense, he diverted the funds to his personal use .
The investigation was conducted by IRS Criminal Investigation together with the Small Business Administration’s own investigators, tracing the loan proceeds from SBA disbursement into McCarthy’s accounts. He ultimately pleaded guilty in July 2026, and on October 20, 2026, IRS-CI announced his sentence: 63 months in federal prison, $1,927,935 in restitution, and three years of supervised release .
Public Reaction and Consequences
The sentence was announced by IRS-CI’s Phoenix Field Office, whose acting special agent in charge Scott Brown framed the case around the pandemic’s victims: “While Montana business owners and families were struggling during the COVID pandemic, McCarthy was scheming to defraud the government relief programs for personal gain. This case demonstrates IRS CI’s ongoing commitment to pursuing individuals who abused these pandemic relief programs and ensuring they are held accountable.” The mention of Montana’s business owners was pointed — the shells that stole the money wore Montana registrations, though McCarthy and the funds were in California .
The concrete consequences are severe and cumulative: a five-and-a-quarter-year prison sentence, a restitution order of nearly $1.93 million, and a felony fraud conviction that follows him for life. Assistant United States Attorney Monica Tait handled the prosecution .
Current Status
McCarthy was sentenced by United States District Judge Percy Anderson and, as of the October 20, 2026 announcement, was facing delivery to the Federal Bureau of Prisons to begin his 63-month term, followed by three years of supervised release. The restitution judgment of $1,927,935 remains collectible after his release. IRS-CI noted in its release that the case also fed the Justice Department’s post-2025 fraud-enforcement apparatus, citing the National Fraud Enforcement Division created in April as part of the administration’s Task Force to Eliminate Fraud .
Impact on Their Career/Life
For McCarthy, the impact is straightforward: more than five years in federal prison, a restitution debt approaching two million dollars, and a wire-fraud felony record that forecloses most legitimate business and financial work. His case is also a data point in a wider story — the Montana-shell-company PPP fraud pattern — that has made pandemic-relief fraud one of the most heavily prosecuted white-collar categories of the decade. The agencies involved signaled that the enforcement push is not winding down: the release closes with IRS-CI’s standing description of itself as the federal agency with sole jurisdiction over tax-code violations, and an explicit note that the department’s anti-fraud work supports the national task-force effort .
Sources
- IRS Criminal Investigation, “Los Angeles man sentenced for using Montana shell companies in COVID relief fraud,” October 20, 2026 — source