By Forum Staff
An indictment was recently unsealed in Long Island federal court charging seven people—including two borough residents—with conspiracy to defraud the United States, wire fraud, and aiding and assisting the preparation of false tax returns, prosecutors said.
Keith Williams, Janine Davis, Morais Dicks, James Hames, Jr., Ewendra Mathurin of Queens Village, and Tiffany Williams were arrested last Wednesday; Jamari Lewis, also of Queens, will be arraigned in the Eastern District of New York at a later date.
Congress created the Employee Retention Credit and the Sick and Family Leave Credit 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-percent 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- percent drop in gross receipts due to the pandemic. By 2021, the percentage credit increased to 70 percent 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 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 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.
