Tennessee Tax Preparer Pleads Guilty to $80M Pandemic-Relief Fraud Scheme

The owner of a tax preparation business in Tennessee pleaded guilty today to orchestrating a massive fraud scheme that steered approximately $80 million in pandemic relief funds designed to help small businesses and workers to herself and her clients.

According to court documents and statements made in court, Renata Walton, 45, of Mississippi, owned and operated a tax preparation business in Moscow, Tennessee. From approximately March 2022 through August 2023, Walton conspired with one of her employees to file false tax returns for clients seeking fraudulent refunds based on the employee retention credit (ERC) and paid sick and family leave credit. Congress created both the ERC and the paid sick and family leave credit to aid struggling businesses during the COVID-19 global pandemic. The employee, Nicole Jones, also known as Nicole Dickerson, of Cordova, Tennessee, previously pleaded guilty on Aug. 15, 2025, for her role in the offense.

Among other schemes, Walton and Jones reported fictitious wages on clients' tax returns to fraudulently claim the ERC and paid sick and family leave credits, knowing their clients had not paid wages to their employees in those amounts and were not entitled to the credits. Walton also filed false applications to the U.S. Small Business Administration (SBA) for loans from the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program, government funding intended to provide financial assistance to Americans suffering economic harm during the COVID-19 pandemic. To support these false claims, Walton submitted false tax forms to the SBA. As a result of the scheme, clients received tax refunds, often exceeding $100,000, and then Walton and Jones received a fee from the clients, which was typically around $15,000 per return.

When the IRS began contacting clients to recover the fraudulently issued pandemic program funds, Walton obstructed the IRS's efforts. She gave the clients letters to provide to the IRS falsely asserting, among other things, that the fictitious wages Walton and Jones reported on their tax returns to claim the ERC were legitimate. Walton and Jones also did not file tax returns for tax year 2022, so they did not pay taxes on the income they earned through their criminal schemes.

In total, Walton filed tax returns and other documents claiming nearly $80 million in pandemic funds and tax refunds that she and her clients were not entitled to receive, causing a loss of more than $52 million to the United States. Jones was also responsible for a portion of these fraudulent claims.

Both Walton and Jones face a maximum penalty of 20 years in prison for conspiracy to commit wire fraud, a maximum penalty of 20 years in prison for each count of wire fraud, a maximum penalty of 10 years in prison for each count of money laundering, a maximum penalty of three years in prison for each count of assisting in the preparation of a false tax return and a maximum penalty of one year in prison for willful failure to file a return. Walton also faces a maximum penalty of 20 years in prison for obstruction of justice.

A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Walton is scheduled to be sentenced on June 18. Jones is scheduled to be sentenced on June 9.

Assistant Attorney General A. Tysen Duva of the Justice Department's Criminal Division and U.S. Attorney D. Michael Dunavant of the Western District of Tennessee made the announcement.

IRS Criminal Investigation is investigating the case.

Trial Attorney Caroline Pearson of the Criminal Division's Tax Section and Assistant U.S. Attorneys William Bateman and Tony Arvin for the Western District of Tennessee are prosecuting the case.