Federal prosecutors in Tennessee have charged two tax preparers with defrauding the federal government of $65 million in Covid relief monies.
The Memphis U.S. Attorney’s office announced this week that Renata Walton, 44, and Nicole Jones, 36, were indicted on more than 50 counts, including wire fraud, money laundering, filing false tax returns, and obstruction of justice.
The office said Walton was charged separately with filing fraudulent disaster loan and paycheck protection applications to the Small Business Administration.
After entering not guilty pleas on Monday, the two women were freed on a $100,000 bond. Court filings did not list any lawyers for them.
In Moscow, Tennessee, Walton owns and runs R&B Tax Express. It has been alleged that she and Jones “falsified numbers provided to the IRS on personal and business tax returns from 2020 through 2024.”
Walton and Jones, both from Olive Branch, Mississippi, claimed for tax credits for their clients under the Sick and Family Leave Credit and the Employee Retention Credit, but the clients were not eligible, according to the prosecution.
However, prosecutors claimed that the clients paid Walton and Jones significant sums that the two women laundered through local banks, and they also obtained six-figure tax returns.
The clients’ payment to Walton and Jones was not disclosed by the U.S. Attorney’s office.
A refundable tax credit known as the Employee Retention Credit is available to specific qualified companies and organizations who employed people and were impacted by the pandemic. Employers received tax credits for salaries paid for leave taken by employees who needed time off to recuperate from illnesses, injuries, disabilities, or vaccination-related conditions under the Sick and Family Leave Credit.
If found guilty, Walton and Jones may spend up to 20 years in prison for each count of wire fraud and conspiracy to commit wire fraud, 10 years in prison for each money laundering count, 3 years in prison for each fraudulent tax return preparation count, and 1 year in prison for each tax return failure count. According to prosecutors, Walton faces 20 years in prison for her lone obstruction of justice count.
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