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Sixth North Carolina Return Preparer Sentenced in $23.9 Million Pandemic-Relief Fraud Scheme

Summary

Nejlai Mitchell, owner of a tax return preparation business in Lumberton and Hope Mills, North Carolina, was sentenced on October 1, 2026 to 60 months in prison for conspiring to prepare false returns claiming refunds based on COVID-19 tax credits, according to a Justice Department release. From approximately April 2022 through May 2023, Mitchell and seven employees filed false returns seeking refunds under the paid sick and family leave credit, a total of approximately $23.9 million in fraudulent refund claims, of which the IRS paid out approximately $13,890,697. Five other preparers were sentenced earlier: Tiffany Moody to 26 months on September 3, 2026; Shaneen Ray and Eyoubo McBurney to 18 months each and Sylvia Swindell to 16 months on July 8, 2026; and Katrena Stanback to six months on July 9, 2026. Office manager Whitnee Leach pleaded guilty in May 2026.

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The owner of a North Carolina tax return preparation business was sentenced on October 1, 2026, to 60 months in prison for conspiring to prepare false returns claiming fraudulent refunds based on COVID-19 tax credits.

According to court documents and statements made in court, Nejlai Mitchell owned and operated a tax return preparation business out of Lumberton, North Carolina, and Hope Mills, North Carolina. From approximately April 2022 through May 2023, Mitchell and seven employees filed false tax returns seeking fraudulent refunds based on the paid sick and family leave credit, a credit passed by Congress to aid struggling businesses during the COVID-19 global pandemic. The conspiracy resulted in a total of approximately $23.9 million in fraudulent tax refund claims. The IRS paid out approximately $13,890,697 of that amount.

Five other return preparers have also been sentenced for their roles in the scheme. The co-conspirators prepared federal tax returns for clients that included materially false items. On September 3, 2026, Tiffany Moody was sentenced to 26 months in prison. On July 8, 2026, Shaneen Ray was sentenced to 18 months in prison, Eyoubo McBurney was sentenced to 18 months in prison, and Sylvia Swindell was sentenced to 16 months in prison. On July 9, 2026, Katrena Stanback was sentenced to six months in prison.

Mitchell pleaded guilty to conspiracy and preparing and filing false tax returns. The tax return preparation business’s office manager, Whitnee Leach, pleaded guilty in May 2026 to participating in the same conspiracy and filing false tax returns. The remaining five defendants pleaded guilty to preparing and filing false tax returns for clients. Jeannie Negron pleaded guilty in August 2025 to the same charges.

Assistant Attorney General Colin McDonald of the Justice Department’s National Fraud Enforcement Division and U.S. Attorney W. Ellis Boyle of the Eastern District of North Carolina made the announcement.

IRS Criminal Investigation is investigating the case.

Trial Attorney Caroline Pearson and Assistant U.S. Attorney Ethan Ontjes of the Eastern District of North Carolina are prosecuting the case.

On April 7, the Department of Justice announced the creation of the Fraud Division. The Fraud Division is laser-focused on investigating and prosecuting those who commit fraud against the American people. The Department’s work to combat fraud supports President Trump’s Task Force to Eliminate Fraud, a whole-of-government effort chaired by Vice President J.D. Vance to eliminate fraud, waste, and abuse within Federal benefit programs.

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