DOJ, IRS Uncover $490 Million in Alleged Tax Fraud in Nationwide Crackdown
The Department of Justice announced the results of its first ever National Tax Enforcement Surge.
The 45-day surge brought together 35 U.S. Attorneys Offices and Internal Revenue Service Criminal Investigation (IRS-CI). The coordinated effort resulted in enforcement actions against 76 defendants in cases involving more than $490 million in alleged and proven intended tax losses.
“Every dollar stolen through tax fraud is a dollar taken from the American people,” said U.S. Attorney General Todd Blanche. “What we uncovered during this concentrated surge is only the tip of the iceberg.”
The surge resulted in 23 charging actions against 31 defendants involving more than $350 million in alleged intended tax losses. The remaining 39 enforcement actions included trials, guilty pleas, and sentencings involving an estimated $140 million in intended losses.
At a news conference. IRS-CI Chief Jarod Koopman hailed the actions as an “entirely new approach in our enforcement strategy” and said that more actions like this are to come.
“We are not looking for the family that misread a line on their tax return, or the small business owner who inadvertently claimed a deduction but turned out not to qualify,” said Assistant Attorney General Colin McDonald of the DOJ National Fraud Enforcement Division. “We are looking for people who lied on purpose to take money that they knew did not belong to them.”
McDonald noted that the “bread and butter” cases in the enforcement surge involved tax preparers.
Among them was Sherita Booker of Ohio, who was charged with allegedly preparing false tax returns and seeking more than $11.8 million in fraudulent refunds for clients using programs that included COVID-19 sick leave credits.
Another case involved Nejlai Mitchell of North Carolina, who was sentenced to 60 months in federal prison for conspiring to prepare false returns seeking fraudulent refunds based on COVID-19 tax credits. The conspiracy involved approximately $23.9 million in fraudulent refund claims, of which the IRS paid nearly $13.9 million.
Other notable cases include four Texas residents who are accused of stealing $200 million from taxpayers by promoting and selling fraudulent trust schemes that were used to shelter more than $1.5 billion of income.
