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Leon Haynes, 50, was originally arrested on a criminal complaint last July. The investigation leading to the charges continued before a grand jury in Newark.
The result: a 55-count indictment for tax evasion, preparing false returns, aggravated ID theft and mail fraud, authorities said.
Haynes fraudulently sought more than $150 million from the IRS by claiming phony COVID-related employment tax credits on 1,600 returns, said U.S. Attorney for New Jersey Phillip R. Sellinger and Acting Deputy Assistant Attorney General Stuart M. Goldberg of the U.S. Justice Department.
An “employee retention credit” that Jones fraudulently tapped was "earmarked for struggling small businesses who needed financial relief during the COVID 19 pandemic," Sellinger said.
It helped reduce the employment tax businesses owed to the IRS, he said.
Congress also authorized a credit that a business could take against employment taxes to reimburse businesses for the wages paid to employees who were on sick or family leave or otherwise couldn't work because of the pandemic.
This “paid sick and family leave credit” was equal to the wages the business paid those workers.
Haynes explored that credit, as well, the indictment says.He lied to his clients, telling them they were entitled to the COVID-relief money "simply because they had a business," Sellinger noted.
He also submitted forms to the IRS "often without consulting his clients," which the U.S. attorney said "grossly overstated the number of employees and the amount of wages paid to fraudulently claim these COVID-related tax credits."
Haynes submitted similarly false forms for four of his own companies, Sellinger said.
Haynes, who also had an office in Bogota, charged each client up to 15% for the service, the original complaint filed in U.S. District Court in Newark says.
"At Haynes’ request, many clients paid him those fees in cash," it says.
He didn't include in the income he reported to the IRS on his own personal and business returns, Selilnger said.In the end, the IRS mailed Haynes a combined $1.43 million in multiple checks -- all based on false claims, the U.S. attorney said.
Sellinger credited special agents of IRS – Criminal Investigation, special agents of the Social Security Administration's Office of the Inspector General and the U.S. Postal Service with the investigation leading to the criminal charges and indictment ultimately secured by Assistant U.S. Attorney Fatime Meka Cano of his Economic Crimes Unit in Newark and Justice Department Trial Attorney Samuel Bean.
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