Actually the guy was just out of med school, very green/wet behind the ears.  They didn't really say they were going to prosecute him, but if he would help them by giving them some funds to help their investigation it would be nice of him.  They said they would give it back and they did.  So the first two draws he gave them and they gave them back in full within weeks apart.  I believe they were between $5k and $10k to begin with.  

Then they asked for a 3rd then a 4th and maybe there was a 5th, before he became concerned because those 2 or 3 hadn't been paid back as quickly as the others.  He was still talking to them and asking when he would get his money back as the other 2 earlier.   They kept giving him the run around and asked for another payment, but then he called the FBI about the situation and asked them to come to their offices to discuss the matter and clear his name.  They said they didn't know anything about him or the DOJ targeting him for a drug case.  So they had him come in for a formal in person visit at the local field office.  That is when all of it became evident that it was a scam and was told they haven't ever seen one so well done, that, that was the best they had ever encountered yet.  

So he lost around $50 to 60K in 2024.  So if this is a potential business loss that can be counted as an expense, we would have to do an amended return.  Which is ok since we have still 2 years to do so.  What sucks for him is it caused him to either count those as owner draws or an expense, which hurt his equity to make him have a shareholder loan to be repaid back ASAP.  If this wouldn't have happened he would of had a positive equity and not worried about a negative equity or shareholder loan that could cause capital gains/interest payments.