7 People Charged In $600 Million Covid-19 Tax Fraud Scheme

The Justice Department (DOJ) has unsealed an indictment in Central Islip, New York, which accuses seven individuals of operating a multi-state conspiracy to defraud the United States. According to the indictment, the defendants allegedly filed over 8,000 false tax returns to claim COVID-19-related employment tax credits, resulting in a loss of more than $600 million.

From November 2021 to June 2023, the Department of Justice (DOJ) uncovered a case where Keith Williams, Jamari Lewis, Morais Dicks, Janine Davis, Tiffany Williams, James Hames Jr., and Ewendra Mathurin took advantage of programs designed to support businesses affected by the pandemic.

The Department stated that the scheme revolved around Credit Reset, a credit repair business owned by Keith Williams.

The Department explained that the defendants, who worked as tax preparers, submitted more than 8,000 fraudulent employment tax returns to the IRS. They falsely claimed COVID-related tax credits for both themselves and their clients.

The Department of Justice (DOJ) has stated that every return supposedly included deceitful claims, such as overstated sick and family leave credits, or duplicated credits for the same wages.

According to the department, the defendants made a profit by receiving refund checks from the U.S. Treasury and charging their clients fees or a percentage of their refunds.

According to the Department of Justice (DOJ), the individuals involved in the scheme not only carried out fraudulent activities themselves but also enlisted others to participate. As part of their compensation, these recruits were given a portion of the illegally acquired Treasury checks.

The defendants had requested a whopping $600 million in total, out of which the IRS ended up paying around $45 million to both the defendants and their clients, as confirmed by the department.

According to the Department of Justice (DOJ), the defendants allegedly employed various tactics to conceal their activities. One such tactic involved avoiding listing themselves as paid preparers on returns. Additionally, they used virtual private networks to hide their IP addresses.

The Department stated that the conspirators allegedly sold shell companies to clients who did not have businesses in order to file false returns.

According to the Department of Justice (DOJ), the IRS and Social Security Administration requested additional information due to discrepancies in the returns. In response, the defendants frequently provided false responses.

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