Two tax preparers have been charged with defrauding the federal government of $65 million in Covid relief funds, according to federal prosecutors in Tennessee.
Renata Walton, 44, and Nicole Jones, 36, were recently indicted on over 50 counts, including wire fraud, money laundering, preparing false tax returns and obstruction of justice, the U.S. Attorney's office in Memphis said this week in a news release.
Walton was charged separately with submitting false paycheck protection and disaster loan applications to the Small Business Administration, according to the office.
Both women pleaded not guilty Monday and were released on $100,000 bond. No attorneys for them were named on court documents.
Walton owns and operates R&B Tax Express in Moscow, Tennessee, where she and Jones allegedly "falsified numbers provided to the IRS on personal and business tax returns from 2020 through 2024."
Prosecutors said Walton and Jones, both from Olive Branch, Mississippi, applied for tax credits for their clients under the Employee Retention Credit and the Sick and Family Leave Credit, but the clients were not entitled to them.
Yet the clients received six-figure tax refunds and repaid Walton and Jones with large fees that the two women laundered through local banks, prosecutors said.
The U.S. Attorney's office did not specify the amount of money the clients paid to Walton and Jones.
The Employee Retention Credit is a refundable tax credit for certain eligible businesses and organizations that had employees and were affected during the pandemic. The Sick and Family Leave Credit provided tax credits to employers for wages paid for leave taken by workers who needed to recover from injury, disability, illness or conditions related to vaccinations.
If convicted, Walton and Jones face a maximum of 20 years for each count of wire fraud and conspiracy to commit wire fraud, 10 years for each count of money laundering, three years for each count of preparing false tax returns and one year for each count of failing to file a tax return. Walton faces 20 years for her sole obstruction of justice count, prosecutors said.
