Tennessee Man Pleads Guilty to Tax Crimes and Wire Fraud Scheme

Strategic Insights -

A Tennessee man, Edward Zanes, pleaded guilty to tax crimes and wire fraud for his role in a scheme to claim fraudulent refunds based on false COVID-19 employment tax credits. Zanes conspired with others to file false tax returns seeking refunds from the employee retention credit and paid sick and family leave credit, both created by Congress to aid businesses during the pandemic. The scheme involved creating phony businesses without employees or operations to claim bogus credits, with Zanes filing false tax returns that claimed over $3.4 million in refunds and receiving over $1.8 million from the IRS.

Key Takeaways:

  • Edward Zanes, a Tennessee resident, pleaded guilty to tax crimes and wire fraud for his role in a scheme to claim fraudulent refunds based on false COVID-19 employment tax credits.
  • Zanes conspired with others to file false tax returns seeking refunds from the employee retention credit and paid sick and family leave credit, both created by Congress to aid businesses during the pandemic.
  • The scheme involved creating phony businesses without employees or operations to claim bogus credits.
  • Zanes filed false tax returns that claimed over $3.4 million in refunds and received over $1.8 million from the IRS.
  • Zanes faces a maximum penalty of 20 years in prison for conspiring to commit mail and wire fraud, 20 years in prison for each count of mail fraud, and 3 years in prison for each count of aiding and assisting in the filing of a false tax return.
  • IRS Criminal Investigation and the U.S. Secret Service investigated the case.
  • Trial Attorney Zachary A. Cobb of the Justice Department's Tax Division and Assistant U.S. Attorney Mac Heavener for the Eastern District of Tennessee are prosecuting the case.

Statistics:

  • $3.4 million: The amount claimed in tax refunds by Zanes through false returns.
  • $1.8 million: The amount received by Zanes and his co-conspirators from the IRS.
  • 20 years: The maximum penalty for conspiring to commit mail and wire fraud.
  • 20 years: The maximum penalty for each count of mail fraud.
  • 3 years: The maximum penalty for each count of aiding and assisting in the filing of a false tax return.

Sources:

  • Court documents and statements made in court, as reported by United States Attorneys General, www.justice.gov.