By: Richard L. Smith
Bergen County tax preparer Mr. Leon Haynes faces charges for orchestrating a fraudulent scheme aiming to siphon off over $150 million from the IRS.
Federal officials said in a statement that this elaborate ploy involved filing more than 1,600 falsified tax returns on behalf of Haynes and his clients, exploiting COVID-19-related tax relief measures.
The U.S. Attorney's Office for the District of New Jersey and the Justice Department's Tax Division revealed the charges, marking a pivotal moment in the battle against COVID-19 financial fraud.
Haynes, from Teaneck, New Jersey, is confronted with 55 counts of aiding in the preparation of false tax returns, five counts of mail fraud, one count of aggravated identity theft, and two counts of tax evasion.
These charges follow a previous complaint related to the same fraudulent activities, underscoring the seriousness of Haynes' alleged crimes.
According to U.S. Attorney Phillip R. Sellinger, Haynes exploited critical financial aid programs designed to assist small businesses during the pandemic, converting them into a source of illicit gain.
"Haynes filed over 1,600 phony tax forms seeking more than $150 million in refunds to which he and his clients were not entitled," Sellinger stated, highlighting the gravity of the misconduct.
The indictment details how, from November 2020 to May 2023, Haynes repeatedly misused the employee retention tax credit and the paid sick and family leave credit—programs established by Congress to mitigate the economic impact of the COVID-19 pandemic on small businesses.
By grossly overstating employee numbers and wages, Haynes managed to fraudulently claim these credits, not only for his clients but also for four of his own companies.
The IRS, misled by Haynes' false claims, disbursed at least $40 million in refunds to his clients. Haynes reportedly took a cut of these refunds as fees, often demanding payment in cash, and failed to report this income on his or his businesses' tax returns.
Federal officials say Haynes himself received around $1.43 million in tax refunds based on the fraudulent submissions for his businesses.
The legal consequences Haynes faces are severe, with penalties for the various counts ranging from three to twenty years in prison, in addition to substantial fines.
The case also emphasizes the determined efforts of the IRS and law enforcement to preserve the integrity of the tax system and pandemic relief programs, as noted by Acting Special Agent in Charge Jenifer L. Piovesan of the IRS – Criminal Investigation, Newark Field Office.
Officials said the indictment serves as a stern warning against pandemic fraud and a commitment to prosecuting those who exploit national crises for personal gain.