A Robeson County tax business owner has pleaded guilty in a pandemic-relief fraud scheme that federal prosecutors say led the IRS to pay out nearly $13.9 million in fraudulent refunds.
Nejlai Mitchell, 48, pleaded guilty to conspiring to prepare false tax returns claiming fraudulent refunds based on COVID-19 tax credits and to assisting in the preparation of false tax returns, according to the
U.S. Attorney’s Office for the Eastern District of North Carolina. Mitchell owned and operated a tax return preparation business out of Lumberton and Hope Mills.
Prosecutors said Mitchell and seven employees filed false returns from about April 2022 through May 2023 seeking refunds based on COVID-19 paid sick and family leave credits. The scheme resulted in the IRS paying approximately $13,890,697 in fraudulent tax refund claims, according to federal officials.
Eight Tax Preparers Have Now Pleaded Guilty
Mitchell is the business owner named in the latest guilty plea. Seven other tax return preparers had already pleaded guilty for their roles in the same scheme: Tiffany Moody and Shaneen Ray pleaded guilty in December 2025, Eyoubo McBurney and Katrena Stanback pleaded guilty in September 2025, Jeannie Negron and Sylvia Swindell pleaded guilty in August 2025, and Whitnee Leach pleaded guilty in May 2026.
The six preparers other than Mitchell and Leach pleaded guilty to preparing federal tax returns for clients that included materially false items. Mitchell and Leach both pleaded guilty to participating in the conspiracy and assisting in the preparation of false tax returns.
The Refund Claims Used COVID Tax Credits
The tax credits at the center of the case were passed by Congress during the COVID-19 pandemic to help qualifying businesses cover paid sick and family leave. Prosecutors said Mitchell and the employees used those credits to seek refunds their clients were not entitled to receive.
Assistant Attorney General Colin M. McDonald of the Justice Department’s National Fraud Enforcement Division said the group failed to honor its legal and ethical duties as tax preparers and used taxpayer-funded relief from a national emergency to enrich themselves. IRS Criminal Investigation is investigating the case.
Sentencing Is Still Ahead
Mitchell is scheduled to be sentenced in September. Leach is scheduled to be sentenced in August, and the remaining six defendants have sentencing hearings set for July 2026.
Mitchell and Leach each face up to five years in prison for the conspiracy count and up to three years for preparing and filing false tax returns. DOJ said Mitchell also faces a $500,000 fine and will be ordered to pay a forfeiture money judgment of $13,890,697.
The remaining six defendants each face up to three years in prison for preparing and filing false returns for clients. A federal judge will determine each sentence after reviewing the U.S. Sentencing Guidelines and other statutory factors. The case is listed as No. 7:26-CR-38-M in the Eastern District of North Carolina.