Two tax preparers have been indicted for allegedly orchestrating a $65 million fraud scheme exploiting pandemic relief programs, federal prosecutors announced Wednesday.
What Is the Indictment?
Renata Walton, 44, and Nicole Jones, 36, residents of Olive Branch, Mississippi, allegedly submitted fraudulent claims under federal programs designed to assist businesses impacted by COVID-19.
The pair were indicted by a federal grand jury on more than 50 counts, including wire fraud, money laundering, preparing false tax returns and obstruction of justice, the U.S. attorney's office in Memphis, Tennessee, said in a news release.
Walton and Jones pleaded not guilty to the charges during their court appearance on Tuesday. Each was released on a $100,000 bond, and their business, R&B Tax Express in Moscow, Tennessee, appears to have ceased operations for the time being with phone messages noting it is closed "for the season." Court documents do not list attorneys for either defendant.
What Was the Alleged Scheme?
Federal prosecutors claim the duo improperly filed for tax credits on behalf of their clients under the Employee Retention Credit (ERC) and the Sick and Family Leave Credit.
These programs were designed to provide refundable tax credits to businesses impacted by the pandemic and to support wages paid for employee leave due to illness or vaccination-related conditions.
According to the indictment, the clients—who were not eligible for these credits—received six-figure refunds with Walton and Jones taking substantial fees laundered through local banks.
In addition to these allegations, Walton is accused of submitting false applications for Paycheck Protection Program (PPP) loans and Economic Injury Disaster Loans (EIDL) to the Small Business Administration.
Prosecutors noted that both women continued their fraudulent activities even after being warned of the federal investigation and were "put on notice."
Walton reportedly advised her clients to avoid cooperating with Internal Revenue Service (IRS) agents, the indictment states.
Federal authorities emphasize that the total fraudulent claims submitted by Walton and Jones exceeded $65 million.
Similar Cases
This case comes as efforts are being made to hold those exploiting pandemic relief measures accountable.
In October, a California official agreed to plead guilty to a conspiracy charge, marking a significant development in a federal investigation into the misuse of COVID-19 relief funds.
Prosecutors allege that Orange County First Supervisor Andrew Do was involved in a scheme involving a charity to funnel millions of dollars meant to aid vulnerable residents during the pandemic into personal gain.
On October 22, Do agreed to sign a guilty plea to conspiracy to commit bribery in connection to the scheme.
As part of his plea agreement, Do will step down from his position, making him the first Orange County supervisor to face such charges in five decades, according to District Attorney Todd Spitzer.
"Mr. Do unequivocally broke the trust of the public," Spitzer said during a joint news conference with federal prosecutors.
The investigation revealed that the Viet America Society, a nonprofit touted by Do that's meant to provide meals for elderly and disabled residents, misappropriated nearly $10 million with only a fraction of the money going toward its intended purpose.
According to U.S. Attorney Martin Estrada, just 15 percent of the funds were used for the charity's mission, while the rest was diverted to real estate investments and other personal interests.
This article includes reporting from The Associated Press.
English (US) ·