An Illinois resident, Lakeibia Fannin, has pleaded guilty to conspiring to defraud the United States by filing false claims for COVID-19 related employment tax credits. According to court documents and statements presented in court, Fannin worked with others in Nevada from June 2022 through November 2023 to submit fraudulent tax returns seeking refunds based on the employee retention credit (ERC) and paid sick and family leave credit.
Authorities stated that neither Fannin nor her businesses were eligible for these refundable credits in the amounts claimed. The proceeds were used for personal expenses such as vacations, a cruise, jewelry, designer clothes, and a car. In total, Fannin requested more than $3.5 million in refunds and received over $1.4 million.
Congress created the ERC during the COVID-19 pandemic to help small businesses reduce their employment tax obligations to the IRS. Additional credits were also authorized to reimburse businesses for wages paid to employees who could not work due to COVID-19-related sick or family leave.
Fannin is scheduled for sentencing on March 19, 2026. She faces up to 10 years in prison along with supervised release, restitution, and monetary penalties. Sentencing will be determined by a federal district court judge after considering U.S. Sentencing Guidelines and other legal factors. Fannin has agreed to pay more than $1.4 million in restitution to the IRS.
First Assistant United States Attorney Sigal Chattah for the District of Nevada and Acting Special Agent in Charge Jarom Gregory for IRS Criminal Investigation’s Phoenix Field Office announced the plea agreement.
The case is being investigated by IRS Criminal Investigations and the Treasury Inspector General for Tax Administration. Trial Attorney John C. Gerardi of the Criminal Division and Assistant U.S. Attorney Richard Anthony Lopez of the District of Nevada are prosecuting.
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