What happened
NBC10 Philadelphia reported on 10 November 2026 that Latisha Dudley, 51, and Timeeka Loud, 47, both of Philadelphia, pleaded guilty last week to aiding and assisting in the preparation of false tax returns, mail fraud and theft of government funds, according to U.S. Attorney David Metcalf of the Eastern District of Pennsylvania. Prosecutors said Dudley's scheme claimed about $86 million in COVID-19-related tax credits and Loud's about $23 million, through returns for businesses with little or no operations that inflated employee numbers and wages. The IRS paid out about $7.9 million on Dudley's returns and $4.6 million on Loud's, and each collected at least $1.2 million in preparer fees, according to court filings. Seven other people who worked with them pleaded guilty between May and October 2026. Both are due to be sentenced in February 2027.
How the scam works
According to U.S. Attorney David Metcalf of the Eastern District of Pennsylvania, as reported by NBC10 Philadelphia, Dudley's scheme claimed about $86 million in COVID-19-related tax credits and Loud's about $23 million, through returns for businesses with little or no operations that inflated employee numbers and wages. The IRS paid out about $7.9 million on Dudley's returns and $4.6 million on Loud's, and each collected at least $1.2 million in preparer fees, according to court filings. Both pleaded guilty to aiding and assisting in the preparation of false tax returns, mail fraud and theft of government funds. Seven other people who worked with them pleaded guilty between May and October 2026. Both are due to be sentenced in February 2027.
Tax credits created as COVID-19 relief were limited to qualifying businesses and wages. People who find unexpected credits on a return prepared in their name should review the filing and contact the IRS if they believe a preparer claimed relief they were not entitled to.
Source
NBC10 Philadelphia, 10 November 2026, reporting the U.S. Attorney for the Eastern District of Pennsylvania: https://www.nbcphiladelphia.com/news/local/2-philly-tax-preparers-7-clients-plead-guilty-in-covid-19-tax-credit-schemes/4494675/
https://x.com/ryan_eminhizer/status/2120184836895781297