Quick Fix | New York | Income Tax Fraud

There is no quick way to fix a credit score. In fact, quick-fix efforts are the most likely ones to backfire – allegedly like any customer who went to “Credit Reset,” the credit repair businesses owned by Keith Williams. The fix that Williams and his five co-conspirators offered was an alleged scheme to file fraudulent income tax returns exploiting COVID-19 pandemic relief programs – a “credit reset” that stole $44 million from the U.S. taxpayer.

Between November 2021 and June 2023, Williams and his co-conspirators allegedly filed over 8,000 quarterly payroll tax returns claiming more than $600 million in COVID-19 related tax credits. On behalf of themselves and their clients, the defendants submitted filings seeking payment under the Employee Retention Credit and the Sick and Family Leave Credit. To claim the credits, they allegedly submitted tax returns to the Internal Revenue Service (IRS) using shell businesses that had no legitimate operations or employees. 

How was this ring uncovered? While there were discrepancies found in the filed returns that warranted an investigation, the big giveaway may have been found in a song. Co-conspirator, Jamari Lewis, using the stage-name “Mr. Chaketah,” posted on social media a recording of song he wrote that was entitled, “I’m Really Sophisticated (IRS).” The album cover for his song even featured the logo of the IRS. The government doesn’t like fraudsters, and they don’t like their logo being used without permission!

On January 23, 2025, Keith Williams, Janine Davis, Morais Dicks, James Hamas, Jr., Jamari Lewis, Ewendra Mathurin, and Tiffany Williams were indicted for conspiracy to defraud the United States.

Excellent by the Department of Justice’s Tax Division.

Today’s Fraud of The Day is based on article “7 People Charged In Massive Covid-Related Tax Credit Scheme” published by Forbes on January 23, 2025.

During and after the Covid-19 pandemic, the employee retention credit became a massive source of new business for many accountants and other tax professionals. But as has been widely reported for years, the IRS often pushed back on aggressive and downright bogus claims. There were also plenty of good faith interpretive questions, where taxpayers and their advisers believed they qualified for the credit but where the IRS said otherwise.

Some claims, though, were beyond the pale, and even have become criminal tax cases. Can a tax audit lead to serious criminal charges? In some cases yes. A case is point is a new federal indictment that charges seven individuals with operating a multi-state conspiracy to defraud the United States of more than $600 million via filing more than 8,000 false tax returns claiming Covid-19-related employment tax credits. The Department of Justice news release is here.