North Carolina Business Owner Sentenced to Five Years in $23.9 Million COVID-19 Tax Relief Fraud Scheme
A North Carolina tax return preparation business owner was sentenced to 60 months in prison on October 1, 2026, for conspiring to submit false tax returns claiming fraudulent COVID-19 relief refunds, the Department of Justice announced.
According to court documents and statements made in court, Nejlai Mitchell owned and operated the business from Lumberton and Hope Mills, North Carolina. Between approximately April 2022 and May 2023, Mitchell and seven employees submitted false tax returns seeking refunds based on the paid sick and family leave credit, a relief measure enacted by Congress during the COVID-19 pandemic. The scheme involved approximately $23.9 million in fraudulent claims, of which the Internal Revenue Service (IRS) paid out roughly $13,890,697.
Mitchell pleaded guilty to conspiracy and preparing and filing false tax returns. Five other return preparers involved in the scheme have also received prison sentences:
- Tiffany Moody: Sentenced on September 3, 2026, to 26 months in prison.
- Shaneen Ray: Sentenced on July 8, 2026, to 18 months in prison.
- Eyoubo McBurney: Sentenced on July 8, 2026, to 18 months in prison.
- Sylvia Swindell: Sentenced on July 8, 2026, to 16 months in prison.
- Katrena Stanback: Sentenced on July 9, 2026, to six months in prison.
Court records state that the business's office manager, Whitnee Leach, pleaded guilty in May 2026 to conspiracy and filing false tax returns. Another individual, Jeannie Negron, pleaded guilty to the same charges in August 2025. The remaining five defendants previously pleaded guilty to preparing and filing false tax returns for clients.
The announcement was made by Assistant Attorney General Colin McDonald of the Justice Department’s National Fraud Enforcement Division and U.S. Attorney W. Ellis Boyle of the Eastern District of North Carolina. The case was investigated by IRS Criminal Investigation and prosecuted by Trial Attorney Caroline Pearson alongside Assistant U.S. Attorney Ethan Ontjes.
US Department of Justice
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