A woman from Las Vegas has admitted to her role in a scheme to defraud the U.S. government by filing fraudulent tax refund claims for COVID-19 employment tax credits, resulting in $33 million in wrongful payments from the IRS.
Court documents reveal that the individual conspired with others between June 2022 and September 2023 to submit approximately 1,227 false tax returns that claimed refundable employment tax credits, including the employee retention credit (ERC) and paid sick and family leave credit. These fraudulent filings accumulated to over $98 million, with the IRS issuing about $33 million before the fraud was detected.
The woman received over $1.3 million in illicit refunds and was additionally compensated nearly $800,000 by co-conspirators whose returns she processed. Prosecutors highlighted that she intentionally filed incorrect claims and misused the proceeds to finance luxury cars, gambling, vacations, and other extravagant expenditures.
The ERC and paid sick and family leave credits were established by Congress to assist businesses affected by the COVID-19 pandemic, offering tax relief for wages paid to employees unable to work. This fraudulent activity undermined these aid programs, diverting vital funds away from businesses that truly required support.
Sentencing is set for February 23, 2026, with the woman facing up to 10 years in prison, alongside possible supervised release, restitution, and fines. The final decision will rest with a federal district court judge, who will consider the U.S. Sentencing Guidelines and various statutory factors.
The investigation was conducted by IRS Criminal Investigation and the Treasury Inspector General for Tax Administration.
