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Seven Defendants Indicted for Filing Over 8,000 False Tax Returns, Attempting to Defraud the U.S. of $600 Million

A federal indictment unsealed today in Central Islip, New York, charges seven individuals with orchestrating a multi-state scheme that sought to defraud the U.S. government of over $600 million by filing more than 8,000 fraudulent tax returns claiming COVID-19-related employment tax credits.

The Alleged Scheme

From November 2021 to June 2023, defendants Keith Williams, Jamari Lewis, Morais Dicks, Janine Davis, Tiffany Williams, James Hames Jr., and Ewendra Mathurin, all current or former New York residents, allegedly exploited federal tax credit programs designed to support businesses impacted by the COVID-19 pandemic.

The fraud allegedly operated out of Credit Reset, a credit repair business owned by Keith Williams. Acting as tax preparers, the defendants filed fraudulent employment tax returns with the IRS, falsely claiming:

  • The Employee Retention Credit (ERC), which provided tax relief for businesses retaining employees during the pandemic.

  • The Paid Sick and Family Leave Credit (SFLC), which reimbursed wages paid to employees on sick or family leave.

According to the indictment, the fraudulent returns improperly claimed tax credits by:
✔ Overstating sick and family leave wages beyond reported earnings.
✔ Duplicating wages as both qualified sick leave and family leave wages.
✔ Claiming both SFLC and ERC for the same wages, which is not permitted by law.

The defendants allegedly profited from the scheme by collecting tax refund checks from the U.S. Treasury, charging clients fees or percentages of their refunds, and recruiting others into the operation in exchange for a cut of the fraudulently obtained funds.

Scope of the Fraud

  • The defendants sought over $600 million in fraudulent refunds.

  • The IRS paid approximately $45 million before detecting the scheme.

  • Some defendants also filed fraudulent Paycheck Protection Program (PPP) loan applications.

To avoid detection, the defendants allegedly:
🔹 Used VPNs (Virtual Private Networks) to hide their IP addresses.
🔹 Did not list themselves as paid preparers on the false tax returns.
🔹 Sold shell companies to clients who didn’t own businesses to facilitate fraudulent claims.
🔹 Submitted false information to the IRS and Social Security Administration (SSA) when discrepancies were noticed.

Criminal Charges and Potential Sentences

The defendants face 45 charges, including:

  • Conspiracy to defraud the United States (maximum 5 years in prison).

  • Wire fraud related to the ERC scheme (up to 20 years per count).

  • Wire fraud related to PPP fraud (up to 30 years per count).

  • Aiding and assisting in the preparation of false tax returns (up to 3 years per count).

A federal district court judge will determine their sentences based on U.S. Sentencing Guidelines and other statutory factors.

Investigation and Prosecution

The case is being investigated by IRS-Criminal Investigation (IRS-CI) and the U.S. Postal Inspection Service (USPIS). The prosecution is led by:

  • Trial Attorney Richard Kelley (Tax Division).

  • Assistant U.S. Attorneys Adam Toporovsky and James Simmons (Eastern District of New York).

  • Former Tax Division Trial Attorney Samuel Bean, who assisted in the investigation.

Legal Disclaimer

An indictment is an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

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