Texas Man Indicted for Conspiring to Defraud the United States Out of $6.9M

Summary

A federal grand jury in the Western District of Texas returned an indictment on September 15, 2026 charging John Labee of Austin, Texas, with conspiring to defraud the United States by making false claims for tax refunds, and with filing false claims. According to court documents, from approximately October 2021 through July 2022, Labee and co-conspirator Andrea Dotson allegedly conspired to file nine false tax returns for Dotson's business, Divine Grinde, claiming the Employee Retention Credit and the Sick and Family Leave Credit on fabricated wage and tax figures, although the business had minimal operations and no employees. The claims sought refunds of approximately $6.9 million, of which the IRS paid over $1.1 million. Dotson previously pleaded guilty on March 10, 2026. The release states that an indictment is merely an allegation.

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Full text

According to court documents, from approximately October 2021 through July 2022, Labee and co-conspirator Andrea Dotson allegedly agreed to have Labee prepare and file false tax returns on behalf of Dotson’s business, Divine Grinde. Although Divine Grinde had minimal operations and no employees, Labee and Dotson allegedly conspired to file nine false tax returns that falsely claimed the Employee Retention Credit and the Sick and Family Leave Credit based on completely fabricated wage and tax figures. Congress created the Employee Retention Credit and the Sick and Family Leave Credit to provide emergency financial assistance in connection with the economic effects of the COVID-19 pandemic. Dotson previously pleaded guilty on March 10, 2026, for her role in the offense.

In total, Labee and Dotson’s fraudulent claims sought refunds of approximately $6.9 million, of which the IRS paid over $1.1 million. Dotson kept a portion of the tax refunds for herself and allegedly provided the remainder to Labee.

Labee is charged with conspiring to file false claims and filing false claims. If convicted, he faces a maximum penalty of 10 years in prison for conspiring to file false claims and 5 years in prison for each count of filing false claims.

Assistant Attorney General Colin McDonald of the Justice Department’s National Fraud Enforcement Division and U.S. Attorney Justin Simmons made the announcement.

IRS Criminal Investigation is investigating the case.

Acting Assistant Deputy Chief Marissa Brodney and Trial Attorney Caroline Pearson of the National Fraud Enforcement Division’s Tax Section are prosecuting the case.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

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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