A woman from Holly Springs, named Lakisha Pearson, has been sentenced to 52 months in jail for committing mail fraud. She was found guilty of falsely claiming the IRS Employee Retention Tax Credit on behalf of others. As part of her sentence, Pearson is also required to repay a staggering amount of $15,942,586.77 in restitution.
Pearson, the owner of Unity Tax Express, admitted guilt in using the internet to submit fraudulent tax credit claims for multiple individuals, resulting in a total of almost $47 million. In addition, he received kickbacks from these individuals. The IRS sent Treasury checks amounting to $15,942,586.77 as ERC credits to the claimants, who were unaware that Pearson had filed tax returns on their behalf and believed they were receiving a government grant.
The IRS Employee Retention Credit (ERC) was introduced as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) in March 2020. Its main objective was to incentivize businesses to retain their employees amidst the ongoing pandemic. Over time, the ERC has been modified and extended through additional legislation such as the Taxpayer Certainty and Disaster Tax Relief Act of 2020, the American Rescue Plan Act, and the Infrastructure Investment and Jobs Act.
“Employee Retention Credits were tax credits designed to provide critical assistance to business owners struggling during the COVID-19 pandemic, but fraudsters and thieves infuriatingly decided to use the credits to line their own pockets during this emergency,” said U.S. Attorney Clay Joyner. “This office plans to pursue charges against all of those who decided to steal from American taxpayers, and we thank the IRS for the investigation of this case.”
Prosecutors have revealed that the scheme in question was first discovered during a separate criminal investigation, which ultimately led to Pearson being convicted for Payroll Protection loans. Pearson is currently awaiting sentencing in that case.