Nationwide — Eight African American tax preparers in North Carolina have pleaded guilty to their roles in a multimillion-dollar tax credit fraud scheme during the pandemic that cost the IRS nearly $14 million in fraudulent refunds. Federal prosecutors said the group filed false tax returns over more than a year, using pandemic-related tax credits their clients were not eligible to claim.
Nejlai Mitchell, 48, owned a tax preparation business with offices in Lumberton and Hope Mills. She pleaded guilty on Wednesday to conspiracy to prepare false tax returns and assisting in the preparation of false tax returns, said the U.S. Attorney’s Office for the Eastern District of North Carolina.
According to WWAYTV3, prosecutors said Mitchell and seven employees filed fraudulent tax returns between April 2022 and May 2023. The returns falsely claimed tax credits, prompting the Internal Revenue Service to issue about $13.9 million in refunds that should not have been paid.
Authorities said the fraudulent filings were part of a broader scheme involving nearly $25 million in false pandemic-related tax credit claims. Investigators alleged the tax preparers knowingly used the credits to secure refunds for clients who did not qualify.
The seven other tax preparers who pleaded guilty are Tiffany Moody, Shaneen Ray, Eyoubo McBurney, Katrena Stanback, Jeannie Negron, Sylvia Swindell, and Whitnee Leach.
Mitchell is scheduled to be sentenced later this year. She faces up to eight years in federal prison, a fine of up to $500,000, and the forfeiture of nearly $13.9 million connected to the fraudulent refunds.
Chief U.S. District Judge Richard E. Myers II accepted Mitchell’s guilty plea in federal court. IRS Criminal Investigation handled the investigation, and the case is being prosecuted in the U.S. District Court for the Eastern District of North Carolina.