Renata Walton, the owner of a tax preparation business in Tennessee, pleaded guilty to orchestrating a scheme that diverted approximately $80 million in pandemic relief funds intended for small businesses and workers. From March 2022 to August 2023, Walton, along with her employee Nicole Jones, filed false tax returns to claim the Employee Retention Credit (ERC) and paid sick and family leave credits based on fictitious wages that clients hadn’t actually paid.
The scheme also involved fraudulent applications for loans under the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program, which were meant to assist individuals affected by the COVID-19 pandemic. Clients received tax refunds often exceeding $100,000, from which Walton and Jones charged fees around $15,000 per return.
When the IRS began investigating and attempting to recover the improperly issued funds, Walton obstructed their efforts by providing clients with false letters to assert the legitimacy of the fictitious wages. Both Walton and Jones failed to file tax returns for 2022, avoiding taxation on their earnings from the illegal activities.
In total, they caused a loss of over $52 million to the U.S. government. Walton and Jones could each face a maximum of 20 years in prison for conspiracy and specific counts of wire fraud, money laundering, and other offenses. Walton faces additional charges for obstruction of justice, with her sentencing set for June 18 and Jones’s on June 9. The case is being prosecuted by the U.S. Attorney’s office and the Justice Department’s Criminal Division.
Read the full article on the Office of Public Affairs U.S. Department of Justice.
