Source: Office of United States Attorneys
Defendants Allegedly Submitted Over 8,000 Fraudulent Tax Returns Claiming Over $600 Million in Tax Credits for Pandemic Relief
Earlier today, at the federal court in Central Islip, an indictment was unsealed charging Keith Williams, Janine Davis, Morais Dicks, James Hames, Jr., Jamari Lewis, Ewendra Mathurin, and Tiffany Williams with conspiracy to defraud the United States, wire fraud, and aiding and assisting the preparation of false tax returns. Six defendants were arrested this morning in New York and will be arraigned this afternoon before United States District Judge Gary R. Brown. Jamari Lewis is not in custody and will be arraigned in the Eastern District of New York at a later date.
John J. Durham, United States Attorney for the Eastern District of New York, Karen E. Kelly, Acting Deputy Assistant Attorney General of the Justice Department’s Tax Division, Harry T. Chavis, Jr., Special Agent in Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI ), Brendan Donahue, Acting Inspector in Charge, United States Postal Inspection Service, New York Division (USPIS) and William S. Walker, Special Agent in Charge, Homeland Security Investigations, New York (HSI), announced the arrests and charges.
“As alleged, the defendants shamefully took advantage of a global health emergency to line their pockets with millions of dollars that were intended for struggling families and small businesses just trying to stay afloat and lavished themselves with luxury goods while shamefully boasting about their criminal activity,” stated United States Attorney Durham. “My Office will continue to investigate and prosecute those who stole taxpayer dollars intended to assist Americans coping with the impacts of the COVID-19 pandemic.”
“Criminals have found ways to exploit every iteration of aid offered through the COVID-19 pandemic relief funds. The ERC was created to help businesses keep themselves and their employees afloat. Yet, the defendants allegedly stole $44 million from the relief pool and chose to spend their illicit gains on jewelry, designer clothing, and luxury cars. IRS-CI worked this case with our law enforcement partners to make sure that the egregious acts of those arrested today do not go unpunished. It’s time they face justice,” stated IRS-CI New York Special Agent in Charge Chavis.
“This program was created to aide struggling small businesses during the pandemic, instead these individuals exploited it to fraudulently take money from taxpayers for their financial gain. USPIS will continue to aggressively investigate individuals who defraud the government,” stated USPIS Acting Inspector in Charge Donahue. “The outstanding work done by USPIS New York Division, HSI, IRS, DOJ Tax and the United States Attorney’s Office for the Eastern District of New York ensures individuals are brought to justice for their crimes.”
“As alleged in the indictment, an astonishing amount of taxpayer funds were illegally siphoned by a criminal organization from a needs-based government fund. As a result of the close coordination on this investigation, those defendants ultimately found guilty for perpetrating this fraudulent scheme will pay for their greed,” said HSI New York Special Agent in Charge William S. Walker. “HSI continues to work side-by-side with our law enforcement partners to ensure justice is brought to fraudsters who shamelessly steal from our nation’s economic assistance programs.”
Congress created the Employee Retention Credit (ERC) and the Sick and Family Leave Credit (SFLC) to provide emergency financial assistance in connection with the economic effects of the COVID-19 pandemic. The ERC was introduced in 2020 to incentivize businesses to continue paying employees by providing, at first, for a 50% credit on up to $10,000 in wages paid to each employee for the calendar year for businesses closed by government order or who had a 50% drop in gross receipts due to the pandemic. By 2021, the percentage credit increased to 70% per employee per quarter. The SFLC provided a dollar-for-dollar tax credit to businesses that paid wages to employees on sick leave and a two-thirds credit on wages paid to employees on family leave due to COVID-19. Through the PPP, Congress authorized over $600 billion in forgivable loans to small businesses for job retention and other expenses.
According to court documents, between November 2021 and June 2023, the defendants filed over 8,000 quarterly payroll tax returns claiming over $600 million in COVID-19 pandemic relief funds. On behalf of themselves and their clients, the defendants submitted filings seeking payment under the ERC and the SFLC. Several of the defendants also filed fraudulent Paycheck Protection Program (PPP) loan applications.
The scheme primarily operated out of Williams’s purported credit repair business, which was called “Credit Reset.” To claim the ERC and SFLC funds, the defendants and their co-conspirators submitted tax returns to the IRS on behalf of shell businesses that, in the vast majority of cases, had no legitimate operations or employees. In total, the defendants and their co-conspirators successfully secured over $44 million in government funds through this scheme, which they then spent on goods including jewelry, electronics, designer clothing, and luxury automobiles. The defendants flaunted their criminal activity openly. For example, Lewis, an aspiring rapper who uses the stage-name, “Mr. Chaketah,” posted on social media a recording of song he wrote that was entitled, “I’m Really Sophisticated (IRS)” and the album cover for his song featured the logo of the Internal Revenue Service. In a recorded call with a co-conspirator, Williams compared the fraud scheme to “taking candy from a baby.” When investigators executed a search warrant at Williams’s home, they seized millions of dollars’ worth of luxury goods that appear to have been purchased using proceeds of the fraud scheme, including designer items from Rolex, Gucci, Louis Vuitton, Fendi, Balenciaga, and Versace, as well as high-end vehicles, including a Land Rover, a Polaris Slingshot, and a Tesla Model Y.
The charges in the indictment are allegations and the defendants are presumed innocent unless and until proven guilty. The defendants each face up to 20 years in prison if convicted of wire fraud, up to five years in prison for conspiracy and up to three years in prison on aiding and assisting in the preparation of false tax returns.
The government’s case is being handled by the Criminal Section of the Office’s Long Island Division and the Department of Justice’s Tax Division. Assistant United States Attorneys Adam R. Toporovsky and James R. Simmons of the Eastern District of New York, along with Trial Attorney Richard J. Kelley are in charge of the prosecution, with the assistance of Paralegal Specialist Janelle Robinson. Trial Attorney Samuel B. Bean, formerly of the Tax Division, also assisted on the investigation.
The Defendants:
KEITH WILLIAMS
Age: 46
West Hempstead, New York
JANINE DAVIS (also known as “Holiday”)
Age: 41
Wheatley Heights, New York
MORAIS DICKS
Age: 55
Dix Hills, New York
JAMES HAMES, JR. (also known as “Poppa”)
Age: 65
Campbell Hall, New York
JAMARI LEWIS (also known as “Mr. Chaketah”)
Age: 26
Queens, New York
EWENDRA MATHURIN (also known as “Rayda”)
Age: 32
Queens Village, New York
TIFFANY WILLIAMS (also known as “Joy”)
Age: 41
Brooklyn, New York
E.D.N.Y. Docket No. 25-CR-20 (GRB)