A Las Vegas woman has pleaded guilty to her involvement in a scheme to defraud the U.S. government by submitting false claims for tax refunds linked to COVID-19 employment tax credits.
This fraudulent activity led to her receiving approximately $33 million from the Internal Revenue Service (IRS).
Fraudulent Activities
According to court documents, Candies Goode-McCoy worked with accomplices from June 2022 to September 2023 to file around 1,227 fraudulent tax returns.
These returns sought refundable employment tax credits, such as the Employee Retention Credit (ERC) and credits for paid sick and family leave.
Overall, the fraudulent claims surpassed $98 million, and the IRS granted about $33 million before the deceit was uncovered.
McCoy specifically pocketed over $1.3 million in unauthorized refunds, while also profiting around $800,000 from processing the tax returns of others.
Prosecutors maintain that she was fully aware of the fraudulent nature of her claims.
The illicit cash flow enabled her to splurge on luxury cars, gamble at casinos, fund vacations, and engage in various extravagant purchases.
Impact and Consequences
The Employee Retention Credit and the paid sick and family leave credits were established by Congress to support businesses hit hard by the COVID-19 crisis.
Aimed at providing tax relief to help pay employees unable to work, these programs were meant to assist businesses genuinely in need.
Unfortunately, McCoy exploited these protections for her own gain, diverting much-needed funds away from legitimate enterprises.
Scheduled to face sentencing on February 23, 2026, McCoy could incur severe penalties, including a maximum ten-year prison term, supervised release, financial restitution, and additional fines.
The final sentencing decision will be made by a federal district court judge, who will consider the U.S. Sentencing Guidelines and relevant legal factors.
Investigation and Prosecution
The investigation that led to these developments was carried out by the IRS Criminal Investigation unit and the Treasury Inspector General for Tax Administration.
The recent announcement of McCoy’s guilty plea came from Acting Deputy Assistant Attorney General Karen E. Kelly of the Justice Department’s Tax Division and Acting U.S. Attorney Sue Fahami of the District of Nevada.
Prosecutors John C. Gerardi, a trial attorney from the Tax Division, and Richard Anthony Lopez, an assistant U.S. attorney from the District of Nevada, are leading the prosecution in this significant case.
Source: Smallbiztrends