North Carolina tax preparer sentenced to 5 years in prison for nearly $24 million COVID-19 fraud scheme

WILMINGTON, NC (WWAY) — A North Carolina tax preparer has been sentenced to five years in federal prison for her role in a COVID-19 relief fraud scheme that sought nearly $24 million in fraudulent tax refunds.

Nejlai Mitchell, 48, was sentenced for conspiring to prepare false tax returns claiming fraudulent refunds through COVID-19 tax credits and assisting in the preparation of additional fraudulent returns.

A federal judge also ordered Mitchell to pay a forfeiture money judgment of $13,890,697.

According to the U.S. Attorney’s Office for the Eastern District of North Carolina, Mitchell owned and operated tax preparation offices in Lumberton and Hope Mills.

Between April 2022 and May 2023, Mitchell and seven employees filed false tax returns seeking nearly $24 million in fraudulent refunds by exploiting paid sick and family leave tax credits established during the COVID-19 pandemic.

Federal prosecutors said Mitchell’s actions alone caused the Internal Revenue Service (IRS) to issue approximately $13.9 million in fraudulent refunds, accounting for more than half of the total amount sought through the conspiracy.

“The nearly $24 million in fraudulent refunds generated through this scheme were not the result of mistakes or oversight,” U.S. Attorney Ellis Boyle said. “Mitchell and her co-conspirators deliberately stole COVID money intended to help struggling Eastern North Carolinians and used that to enrich themselves at the expense of hardworking taxpayers.”

Mitchell previously pleaded guilty to conspiracy and preparing and filing false tax returns.

Seven co-conspirators have also pleaded guilty in connection with the scheme, with five already receiving federal prison sentences.

Those sentenced include:

• Tiffany Moody: More than two years in prison, sentenced Sept. 3, 2026.

• Shaneen Ray: 18 months in prison, sentenced July 8, 2026.

• Eyoubo McBurney: 18 months in prison, sentenced July 8, 2026.

• Sylvia Swindell: 16 months in prison, sentenced July 8, 2026.

• Katrena Stanback: Six months in prison, sentenced July 9, 2026.

Whitnee Leach, who served as the tax preparation business’s office manager, pleaded guilty in May 2026 to participating in the conspiracy and filing false tax returns.

The remaining six defendants pleaded guilty to preparing and filing false tax returns for clients.

“This prison sentence holds Mitchell accountable for her role in a conspiracy that stole taxpayer funds and corrupted the tax filing process,” Boyle said.

Chief U.S. District Judge Richard E. Myers II handed down Mitchell’s sentence.

The case was investigated by IRS Criminal Investigation.

More information about the case is available through the U.S. Department of Justice.