Las Vegas Business Owner Pleads Guilty to Massive Fraudulent Scheme

A Nevada woman has pleaded guilty to orchestrating a massive COVID-19 employment tax fraud scheme involving the filing of over 1,200 false tax returns and fraudulently claiming millions in refunds.  

Candies Goode-McCoy’s Fraudulent Activities

Candies Goode-McCoy admitted to conspiring to defraud the IRS through fraudulent claims for the Employee Retention Credit (ERC) and paid sick and family leave credit.  

Details of the Fraud

1. False Tax Returns: Goode-McCoy filed over 1,227 fraudulent tax returns.  
2. Fraudulent Refund Claims: The total fraudulent claims exceeded $98 million.
3. IRS Payout: The IRS paid out $33 million in refunds before discovering the fraud.  
4. Personal Gain: Goode-McCoy collected over $1.3 million in fraudulent refunds and $800,000 in fees from other participants.  
5. Lavish Spending: The stolen money was used for luxury cars, casino gambling, vacations, and other lavish purchases.  

How the COVID-19 Employment Tax Fraud Scheme Worked

Goode-McCoy exploited the COVID-19 relief programs designed to support struggling businesses.  

Scheme Mechanics

1. Exploitation of ERC and Paid Leave Credits: Goode-McCoy filed fraudulent tax returns claiming these refundable credits.  
2. Manipulated Records: She manipulated records to maximize refunds, knowing neither she nor her clients were eligible.
3. Fraudulent Claims: From June 2022 to September 2023, she filed fraudulent tax returns for herself and others.  
4. Misuse of Funds: Funds were used for personal luxury purchases.  

IRS Crackdown on COVID-19 Tax Fraud

The IRS and TIGTA are aggressively pursuing COVID-19 tax fraud cases.  

Government Actions

1. Investigation of Fraudulent ERC Claims: The IRS has identified billions of dollars in fraudulent ERC claims.  
2. Prosecution of Fraudulent Filers: IRS Criminal Investigation and TIGTA actively prosecute those who abused pandemic-era tax relief programs.  
3. Protection of Legitimate Relief Efforts: Fraudulent claims undermine legitimate relief efforts.

Legal Consequences for McCoy

Goode-McCoy faces significant legal repercussions for her actions.

Penalties and Sentencing

1. Guilty Plea: Goode-McCoy pleaded guilty to conspiracy to defraud the U.S. government.  
2. Sentencing Date: Sentencing is scheduled for February 23, 2026.
3. Potential Prison Sentence: She faces up to 10 years in federal prison.  
4. Restitution and Monetary Penalties: She must pay restitution and monetary penalties.
5. Prosecuting Agencies: The Justice Department’s Tax Division and the U.S. Attorney’s Office for the District of Nevada are prosecuting the case.  

Key Takeaways for Business Owners

Business owners should be vigilant and avoid fraudulent ERC schemes.

Protecting Against Fraud

1. Beware of “Too Good to Be True” Offers: Be skeptical of fraudulent ERC schemes.
2. Maintain Legitimate Documentation: Businesses must have documentation proving eligibility for ERC credits.
3. IRS Audits and Investigations: The IRS is aggressively auditing ERC claims and investigating fraudulent filers.  
4. Correcting Mistakes: If you mistakenly claimed an ERC credit, consult a tax professional immediately.

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