Shocking Arrests in COVID-19 Tax Credit Fraud Exposed

Nature of an unprecedented fraud unravels, as seven individuals find themselves at the heart of an IRS’s largest-ever Employee Retention Credit scandal involving deceitful COVID-19 tax claims.

Key Insights

Seven individuals charged in the largest Employee Retention Credit scheme in the U.S.
The defendants face various charges, including conspiracy to defraud the United States.
Approximately $45 million in fraudulent pandemic relief funds were received by the defendants and their clients.
Sophisticated methods were employed to commit fraud, including the use of virtual private networks and shell companies.

Scheme Unveiled

Seven individuals have been charged with executing the largest Employee Retention Credit (ERC) scheme in the United States. The defendants sought to illicitly drain over $600 million in COVID-19 tax credits intended for distressed businesses. Operating under the guise of “Credit Reset,” this group of fraudsters set up fake business entities and falsified client data. They submitted over 8,000 fraudulent tax returns to claim COVID-related tax credits.

The suspected perpetrators include Keith Williams, Jamari Lewis, Morais Dicks, Janine Davis, Tiffany Williams, James Hames Jr., and Ewendra Mathurin. The IRS-Criminal Investigation (CI) and the United States Postal Inspection Service (USPIS) are spearheading the investigation. These agencies are committed to reprimanding criminal activities that exploit pandemic relief initiatives.

Federal grand jury indicts 7 in $600M COVID-19 benefits scheme

By Clyde Hughes, 1 day ago
UPI News

Jan. 23 (UPI) — A federal grand jury charged seven people with running a multi-state conspiracy attempting to defraud the United States for more than $600 million by filing more…

— Miranda C. Bell Reporting NMS15a Felony Crimes (@truthsearch1957) January 25, 2025

Charges and Allegations

The defendants are facing 45 counts, which include conspiracy to defraud the United States, wire fraud, and assisting in filing false tax returns. By concealing their activities using virtual private networks and refraining from listing themselves as paid preparers, they managed to submit these fraudulent tax claims clandestinely.

“As alleged, the defendants shamefully took advantage of a global health emergency to line their pockets with millions of dollars that were intended for struggling families and small businesses just trying to stay afloat and lavished themselves with luxury goods while shamefully boasting about their criminal activity.” – United States Attorney Durham

If convicted, the accused could land significant prison sentences, with charges carrying potential penalties that could extend to 20 years for wire fraud. Defense attorneys argue that some defendants, including Keith Williams and Morais Dicks, are innocent. They plan to challenge these charges and strengthen their defense.

Fraudulent Activities and Government Response

The IRS paid an estimated $45 million illicitly gained by the defendants and their clients. Apart from the false tax returns, they misappropriated funds from the Paycheck Protection Program, abusing financial aid meant for genuine relief.

“Criminals have found ways to exploit every iteration of aid offered through the COVID-19 pandemic relief funds. The ERC was created to help businesses keep themselves and their employees afloat. Yet, the defendants allegedly stole $44 million from the relief pool and chose to spend their illicit gains on jewelry, designer clothing, and luxury cars. IRS-CI worked this case with our law enforcement partners to make sure that the egregious acts of those arrested today do not go unpunished. It’s time they face justice.” – IRS-CI New York Special Agent in Charge Chavis

The fraudulent activities encompassed facilitating clients to acquire shell companies and buttress illegitimate returns. To combat such scams, there are ongoing discussions and legislative actions, including Senator Joni Ernst’s proposal to extend oversight through the “Complete COVID Collections Act,” underlining the government’s commitment to reclaim misappropriated taxpayer funds.