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Bergen County Tax Preparer Indicted in Multimillion-Dollar COVID-19 Fraud Scheme
Over $40 Million Disbursed by IRS Based on Alleged False Claims in a Scheme to Exploit Pandemic Relief Programs
NEW JERSEY - In a significant development, a federal grand jury has charged Leon Haynes, a tax preparer from Teaneck, New Jersey, with orchestrating a fraudulent scheme seeking over $150 million in refunds from the IRS.
This indictment, announced by U.S. Attorney Phillip R. Sellinger for the District of New Jersey and Acting Deputy Assistant Attorney General Stuart M. Goldberg, underscores a severe misuse of COVID-19 pandemic relief efforts aimed at supporting struggling small businesses.
Charges Faced by Haynes:
Haynes faces 55 counts of aiding and assisting in the preparation of false tax returns, five counts of mail fraud, one count of aggravated identity theft, and two counts of tax evasion. This indictment follows a prior charge against Haynes related to the same fraudulent activities.
Scope of the Fraud:
From November 2020 to May 2023, Haynes is alleged to have filed over 1,600 false tax returns for both himself and his clients, fraudulently claiming COVID-19-related employment tax credits. These credits were designed to alleviate the economic burden on small businesses during the pandemic, offering them a lifeline during a period of unprecedented challenges.
Haynes reportedly misled his clients into believing they were eligible for government relief merely because they owned a business. He is accused of submitting forms that exaggerated the number of employees and wages paid, inflating claims to the IRS for COVID-related tax credits. This resulted in more than $150 million in fraudulent refund requests, with the IRS disbursing at least $40 million based on these claims.
Legal Implications and Penalties:
The legal repercussions for the charges against Haynes are severe, with penalties ranging from a maximum of three years in prison and a $250,000 fine for each count of aiding in the preparation of false returns, to up to 20 years for each mail fraud count.
Additionally, tax evasion charges carry a maximum penalty of five years in prison and a $250,000 fine, and the aggravated identity theft count mandates a two-year consecutive sentence.
The case against Haynes represents a concerted effort by various agencies, including IRS – Criminal Investigation, the Social Security Administration Office of the Inspector General, and the U.S. Postal Service, to combat pandemic-related fraud.
This indictment serves as a stark reminder of the vigilance required to protect the integrity of pandemic relief programs and ensure that aid reaches those truly in need. As the judicial process unfolds, Haynes is presumed innocent unless proven guilty.
For those aware of potential COVID-19 fraud, the Department of Justice encourages reports to the National Center for Disaster Fraud Hotline at 866-720-5721 or through the NCDF Web Complaint Form.
