U.S. Sentences Issued in Massive COVID-19 Tax Fraud Case

The United States Attorney’s Office for the Southern District of Alabama has announced the sentencing of several individuals involved in a massive tax fraud scheme that exploited COVID-19 relief programs. The enforcement actions, part of a nationwide effort led by the Justice Department’s National Fraud Enforcement Division, the Internal Revenue Service (IRS), and IRS Criminal Investigation (IRS-CI), targeted over 76 defendants responsible for more than $490 million in intended losses to American taxpayers.

Echandza Maxie, 43, and her husband, Glennie McGee, 42, both from Mobile, Alabama, were sentenced to 20 years in federal prison. They were found guilty of defrauding the IRS of over $1.5 million in COVID-19-related tax credits. The fraudulent activities were uncovered during a cocaine-trafficking investigation, which involved a court-authorized wiretap, leading to the discovery of a large-scale tax fraud scheme.

Echandza owned and operated a tax-preparation business called 'Self Made Taxes' in Mobile. Along with her sister, Edeszann Maxie, and others, they fabricated fictitious self-employed businesses to file fraudulent tax returns. These returns falsely claimed maximum COVID-19-related credits, approximately $30,000 per return, resulting in more than $1.5 million in fraudulent tax refunds.

The scheme also involved fraudulent applications for Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) loans administered by the Small Business Administration (SBA). Three additional defendants were convicted and sentenced for their roles in defrauding the SBA through these fraudulent applications.

In total, the defendants were ordered to pay over $2.4 million in restitution to the IRS and SBA. The investigation revealed that many individuals whose personal information was used in the scheme were unaware that tax returns had been filed in their names. Some believed they were legitimately eligible for COVID-19 relief and paid significant amounts, between $10,000 and $15,000, for what they thought were legitimate tax-preparation services.

The enforcement actions underscore the efforts of federal prosecutors and agencies to combat fraud related to COVID-19 relief programs, ensuring that funds intended for legitimate businesses and individuals are protected from exploitation.