On July 31, the Department of Justice (DOJ) announced that Leon Haynes, a tax preparer from Teaneck, New Jersey, was arrested for fraudulently seeking over $124,000,000 from the IRS by filing over 1,000 tax returns falsely claiming COVID-19-related employment tax credits.
According to the DOJ, Congress authorized relief measures, including the Employee Retention Tax Credit (ERC) and the Paid Sick/Family Leave Credit, in response to the economic challenges caused by COVID-19 intended to support affected businesses. According to court documents, Haynes allegedly exploited these relief programs between November 2020 and May 2023.
Haynes acting as a tax preparer, purportedly prepared and submitted approximately 1,387 false forms to the IRS on behalf of himself and his clients. The accusations claim that he misrepresented the COVID-19 relief funds to his clients, falsely informing them that they were eligible for financial assistance merely by having a business. He allegedly submitted falsified forms to the IRS without their knowledge, inflating the number of employees and wages paid for their businesses. He is also accused of using similar deceptive practices for three of his own companies.
The IRS claims that he sought approximately $124,751,995 in tax refunds for his companies and other businesses, exploiting the relief meant for those genuinely in need. The IRS reportedly mailed him multiple tax refund checks, totaling $1,007,966 for his own companies, and disbursed $31.6 million in refunds to Haynes’ clients and himself based on the fraudulent tax forms submitted.
The potential consequences of Haynes’ alleged actions are substantial. Each count of aiding and assisting in the preparation of a false return carries a maximum penalty of three years in prison, while mail fraud charges could lead to a 20-year sentence.
In response to such allegations, businesses should seek the support and guidance of a reputable defense law firm. Expert legal representation can help navigate complex regulations and ensure legal compliance. The attorneys at Chilivis Grubman represent clients of all types and sizes in connection to white-collar criminal investigations and litigation. If you need assistance with such a matter, please contact us today.
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