On January 22, 2025, federal authorities unsealed an indictment in Central Islip, New York, charging seven individuals with orchestrating a massive multi-state scheme to defraud the U.S. government of more than $600 million through fraudulent COVID-19 tax credits and loans. The accused include Keith Williams, Jamari Lewis, Morais Dicks, Janine Davis, Tiffany Williams, James Hames Jr., and Ewendra Mathurin, all current or former residents of New York.
The scheme, operating from November 2021 to June 2023, centered on misusing two federal COVID-19 relief programs designed to support businesses during the pandemic:
- The Employee Retention Credit (ERC): This credit incentivized businesses to retain employees during the economic downturn.
- The Paid Sick and Family Leave Credit (SFLC): This reimbursed businesses for wages paid to employees who were unable to work due to COVID-19-related sick or family leave.
Details of the Allegations
According to prosecutors, the defendants operated their fraudulent scheme through a company called Credit Reset, owned by Keith Williams. Acting as tax preparers, they allegedly filed more than 8,000 false tax returns with the IRS, falsely claiming ERC and SFLC benefits on behalf of their clients and themselves. Investigators allege that these returns were fraudulent for several reasons:
- They claimed sick and family leave credits exceeding reported wages.
- They double-counted wages, listing them for both sick leave and family leave credits.
- They claimed both ERC and SFLC benefits for the same wages, which is not allowed under the law.
The defendants reportedly profited by receiving tax refunds directly from the U.S. Treasury and charging their clients fees or a percentage of the refund. Additionally, they allegedly recruited others into the scheme, compensating them with a share of the fraudulently obtained refunds.
To conceal their involvement, the defendants allegedly:
- Avoided listing themselves as preparers on the tax returns.
- Used Virtual Private Networks (VPNs) to obscure their IP addresses while filing returns.
- Sold shell companies to clients who lacked legitimate businesses to enable fraudulent filings.
The indictment also claims the defendants provided false responses to IRS and Social Security Administration (SSA) inquiries about the discrepancies in the tax returns.
Paycheck Protection Program (PPP) Fraud
In addition to the tax fraud, Keith Williams, Lewis, Mathurin, Davis, Tiffany Williams, and Dicks are accused of submitting fraudulent applications for PPP loans, further exploiting federal COVID-19 relief programs.
Scope of the Fraud
The defendants are accused of seeking more than $600 million from the U.S. Treasury, of which approximately $45 million was paid out before investigators identified the scheme.
Charges and Potential Penalties
The seven defendants face a combined 45 charges, including:
- Conspiracy to defraud the United States (maximum penalty: 5 years).
- Wire fraud related to the ERC scheme (maximum penalty: 20 years per count).
- Wire fraud related to the PPP fraud (maximum penalty: 30 years per count).
- Aiding and assisting in the preparation of false tax returns (maximum penalty: 3 years per count).
Sentencing will be determined by a federal judge considering the U.S. Sentencing Guidelines.
Agencies Involved in the Investigation
The investigation was conducted by the IRS Criminal Investigation (IRS-CI) and the U.S. Postal Inspection Service (USPIS). Acting Deputy Assistant Attorney General Karen E. Kelly of the Justice Department’s Tax Division and U.S. Attorney John J. Durham for the Eastern District of New York announced the charges.
Prosecution Team
The case is being prosecuted by Trial Attorney Richard Kelley of the Tax Division, along with Assistant U.S. Attorneys Adam Toporovsky and James Simmons for the Eastern District of New York. Former Trial Attorney Samuel Bean also assisted with the investigation.
The charges underscore the government's commitment to holding accountable those who exploit emergency relief programs designed to help businesses and individuals during times of crisis.
