Defendants allegedly used VPNs and shell companies to abuse public schemes and defraud the government.
A group of seven who allegedly sought to steal hundreds of millions of dollars in the “largest COVID-19 tax credit scheme” by falsely claiming pandemic-era benefits were charged on Jan. 22, according to the U.S. Department of Justice (DOJ).
An indictment unsealed in New York charged the seven people with “operating a multi-state conspiracy in which they attempted to defraud the United States of more than $600 million by filing more than 8,000 false tax returns claiming COVID-19-related employment tax credits,” the agency said in a statement. The fraud targeted programs like employee retention credit (ERC) and paid sick and family leave credit (SFLC), which were passed in response to the COVID-19 pandemic.
The ERC gave tax credits to businesses, incentivizing them to keep employees on their payroll, while SFLC was a reimbursement made to businesses for paying employees “on sick or family leave and could not work because of COVID-19.”
The charges were made against Keith Williams, Jamari Lewis, Morais Dicks, Janine Davis, Tiffany Williams, James Hames Jr., and Ewendra Mathurin; all of whom are either current or former residents of New York.
Between November 2021 and June 2023, the defendants “repeatedly exploited” ERC and SFLC programs, the DOJ said. “The scheme was allegedly headquartered at Credit Reset, a purported credit repair business Keith Williams owned and operated.”
The defendants acted as tax preparers and allegedly filed over 8,000 fake employment tax returns on behalf of themselves and clients, claiming COVID tax credits from the IRS. In some of the fake returns, they allegedly claimed SFLC which exceeded reported wages, according to the department.
The defendants managed to secure refund checks from the Treasury, while also profiting by charging clients a fee or percentage of the tax refunds they received, the agency accused.
“The defendants allegedly concealed their preparation of the false tax returns by not listing themselves as the paid preparer on the tax returns and by using Virtual Private Networks (VPNs) to obscure their IP addresses while filing the false returns,” the DOJ said.
