A group of seven people has been charged for attempting to steal over $600 million in what is considered the largest COVID-19 tax credit fraud scheme in the United States. This group falsely claimed pandemic-related benefits and was indicted on January 22, according to the U. S. Department of Justice (DOJ). The indictment revealed that they filed more than 8,000 fake tax returns to claim COVID-19-related employment tax credits, particularly targeting programs like the employee retention credit (ERC) and paid sick and family leave credit (SFLC).
The ERC was designed to provide tax credits to businesses to encourage them to keep employees on payroll, while the SFLC reimbursed businesses for sick or family leave paid to employees unable to work due to COVID-19. The charges were brought against residents of New York: Keith Williams, Jamari Lewis, Morais Dicks, Janine Davis, Tiffany Williams, James Hames Jr. , and Ewendra Mathurin. From November 2021 to June 2023, they allegedly exploited these programs, with their scheme reportedly based at a business called Credit Reset owned by Keith Williams.
The defendants acted as tax preparers and filed numerous false employment tax returns to obtain tax credits from the IRS. Some of the returns claimed SFLC amounts exceeding reported wages. They received refund checks from the Treasury while profiting by charging clients for the tax refunds. They reportedly hid their activities by not identifying themselves as paid preparers and used Virtual Private Networks (VPNs) to conceal their identities.
In total, the scheme sought $600 million in tax credits, of which the IRS paid out about $45 million. The defendants face multiple charges, including wire fraud and conspiracy to defraud the United States. Some also submitted false applications for loans under the Paycheck Protection Program (PPP) and were charged with wire fraud related to this as well. Convictions could lead to prison sentences ranging from three to 30 years.
The DOJ has previously charged hundreds of individuals for COVID-19 fraud, with substantial amounts linked to pandemic programs. Senator Joni Ernst has introduced a bill to extend the oversight of pandemic recovery loans, emphasizing the need to combat fraud and recover funds.
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