North Carolina Man Pleads Guilty to False Tax Credit Claims: Total Loss Put at $3.78 Million
BUFFALO, N.Y. — A North Carolina man has pleaded guilty to making false, fictitious or fraudulent claims against a government agency, the U.S. Attorney's Office for the Western District of New York announced on November 2. The case is being heard in federal court in Buffalo, Erie County, New York.
U.S. Attorney Michael DiGiacomo said Kareem Highsmith, 51, of Charlotte, in Mecklenburg County, North Carolina, pleaded guilty before U.S. Magistrate Judge Michael J. Roemer. The charge carries a maximum penalty of five years in prison and a fine of $250,000. Sentencing will be scheduled at a later date.
During the COVID epidemic, businesses could claim the refundable Employee Retention Credit (ERC) and the Paid Sick and Family Leave Credit (PSFLC) on IRS Form 941. On July 3, 2022, Highsmith electronically filed a signed Form 941 for CMK Transportation and Delivery Service LLC, a company he owned, for the quarter ending June 30, 2020, falsely representing that CMK employed four paid people and requesting refunds of $84,395.96. The IRS issued a refund check of $77,743.97, although CMK had no business operations or employees that quarter and was entitled to no refund.
Highsmith submitted 10 additional Form 941s for CMK requesting total refunds of $799,623.15, of which he received approximately $324,636.81. He also assisted others in filing fraudulent Form 941s that sought about $2,452,360.19 in refunds, of which $603,572.21 was paid out; he received approximately $78,700 for that assistance. His three Paycheck Protection Program (PPP) loan applications and four Economic Injury Disaster Loan (EIDL) applications, each containing material misrepresentations, sought $443,672.57, of which he received $197,839.57. The total loss amount of his criminal conduct is $3,780,051.87.
The case is being prosecuted by Assistant U.S. Attorney Douglas A.C. Penrose and was investigated by the Internal Revenue Service, Criminal Investigation Division, under the direction of Special Agent-in-Charge Harry Chavis.
Source: U.S. Department of Justice
Published by GSM · USA (original Chinese edition)
Photo: 图：位于 Washington 的美国国税局总部大楼（资料图）。本案由国税局刑事调查处查办。 / Photo: The Internal Revenue Service headquarters in Washington (file photo). The case was investigated by IRS Criminal Investigation.
