NJ tax preparer indicted in $150 million refunds case

🔴 Teaneck tax preparer was indicted with filing fraudulent tax returns

🔴 The Justice Department says the returns sought more than $150M from the IRS

🔴 The IRS paid out $40M based on the false returns filed

NEWARK — A federal grand jury in Newark indicted a New Jersey tax preparer with filing fraudulent returns seeking more than $150 million from the IRS in COVID-19-related tax credits, according to the U.S. Justice Department.

According to the indictment, Leon Haynes, of Teaneck, filed more than 1,600 false tax returns for himself and his clients that claimed COVID-19-related employment tax credits.

The IRS paid out $40 million based on the returns filed by Haynes, who was charged with 55 counts of aiding and assisting in the preparation of false tax returns, five counts of mail fraud, one count of aggravated identity theft, and two counts of tax evasion.

From November 2020 to May 2023, Haynes repeatedly exploited the programs during the pandemic that were intended to help impacted small businesses, according to the indictment. The Department of Justice said Haynes told his clients that the government was giving out COVID-relief money for businesses and that they were eligible for it simply because they had a business.

He then submitted forms to the IRS on behalf of his client’s businesses, without consulting his clients that grossly overstated the number of employees and the amount of wages paid, to falsely claim these COVID-related tax credits.

After the IRS dispersed at least $40 million in tax refunds to Haynes’ clients based on the false tax forms he filed, Haynes allegedly collected a percentage of those refunds as a fee. At Haynes’ request, many clients paid those fees in cash.

If convicted, Haynes faces a maximum penalty of 20 years in prison for each mail fraud charge, a maximum penalty of five years in prison for each tax evasion charge, three years in prison for aiding and assisting in the preparation of false return charges, and two years in prison for the aggravated identity theft charge.

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