North Carolina Tax Preparer Sentenced to 5 Years for Nearly $24 Million COVID Refund Fraud Scheme
The U.S. Attorney's Office for the Eastern District of North Carolina announced that a federal judge in Wilmington has sentenced tax return preparer Nejlai Mitchell to five years in federal prison for conspiring to prepare false tax returns that claimed fraudulent refunds based on COVID-19 tax credits, and for assisting in the preparation of additional fake returns. The court also ordered her to pay a forfeiture money judgment of $13,890,697.
U.S. Attorney W. Ellis Boyle made the announcement after Chief U.S. District Judge Richard E. Myers II handed down the sentence. Boyle said the nearly $24 million in fraudulent refunds generated through the scheme were not the result of mistakes or oversight, and that Mitchell and her co-conspirators deliberately stole COVID money intended to help struggling eastern North Carolinians and used it to enrich themselves at the expense of taxpayers.
Mitchell owned and operated tax return preparation offices in Lumberton and Hope Mills. From April 2022 through May 2023, Mitchell and seven of her employees filed false tax returns seeking fraudulent refunds of almost $24 million by exploiting paid sick and family leave credits, a COVID-19 relief measure enacted by Congress to support struggling businesses. Mitchell's actions alone caused the IRS to issue approximately $13,890,697 in fraudulent tax refunds, more than half of the nearly $24 million channeled through the conspiracy.
Mitchell pleaded guilty to conspiracy and to preparing and filing false tax returns. The business's office manager, Whitnee Leach, pleaded guilty in May 2026 to participating in the same conspiracy and filing false tax returns, and the remaining six defendants pleaded guilty to preparing and filing false tax returns for clients.
Five other co-conspirators have already been sentenced. On September 3, 2026, Tiffany Moody was sentenced to more than two years. On July 8, 2026, Shaneen Ray and Eyoubo McBurney were each sentenced to 18 months and Sylvia Swindell to 16 months. On July 9, 2026, Katrena Stanback was sentenced to six months. Seven co-conspirators in total have pleaded guilty.
IRS Criminal Investigation (IRS-CI) is investigating the case. Related court documents can be found on PACER by searching for Case No. 7:26-CR-38-M.
(Source: U.S. Department of Justice)
Source: U.S. Department of Justice
Published by GSM · USA (original Chinese edition)
Photo: 图：美国国税局总部大楼（华盛顿）。国税局刑事调查局为本案调查机构。Carol M. Highsmith 摄，公共领域，经 Wikimedia Commons。 / Photo: Internal Revenue Service headquarters in Washington. IRS Criminal Investigation investigated this case. By Carol M. Highsmith, public domain, via Wikimedia Commons.
