RALEIGH — A sweeping federal investigation into pandemic‑relief tax fraud has resulted in eight guilty pleas, including the owner of a North Carolina tax preparation business accused of helping file nearly $14 million in fraudulent COVID‑19 refund claims.
Nejlai Mitchell, 31, who operated tax preparation offices in Lumberton and Hope Mills, pleaded guilty Tuesday to conspiracy to defraud the United States and assisting in the preparation of false tax returns. She is scheduled to be sentenced in September, according to the U.S. Department of Justice.
Federal prosecutors say that from April 2022 through May 2023, Mitchell and seven employees submitted tax returns falsely claiming paid sick and family leave credits, a pandemic‑era benefit intended to help struggling businesses. The IRS ultimately paid out $13,890,697 in fraudulent refunds tied to the scheme.
Assistant Attorney General Colin McDonald of the DOJ’s National Fraud Enforcement Division said the group “engineered a calculated scheme to enrich themselves by submitting false returns,” calling the theft of taxpayer‑funded emergency relief “reprehensible and deeply harmful to the public.”
Mitchell’s plea came shortly after Whitnee Leach pleaded guilty on May 19, 2026, to participating in the same conspiracy. Leach is scheduled to be sentenced in August.
Six additional co‑conspirators pleaded guilty earlier:
- Tiffany Moody — Dec. 9, 2025
- Shaneen Ray — Dec. 9, 2025
- Eyoubo McBurney — Sept. 24, 2025
- Katrena Stanback — Sept. 24, 2025
- Jeannie Negron — Aug. 20, 2025
- Sylvia Swindell — Aug. 20, 2025
Mitchell and Leach each face up to five years for conspiracy and three years for preparing false returns. The remaining six defendants face up to three years in federal prison. Their sentencing hearings are set for July 2026.
The case is being investigated by IRS Criminal Investigation and prosecuted by Trial Attorney Caroline Pearson and Assistant U.S. Attorney Ethan Ontjes.
The DOJ noted that the case aligns with the work of the newly formed National Fraud Enforcement Division, part of a federal initiative to combat fraud, waste, and abuse in government benefit programs.
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