A pair from Hampton Roads has admitted guilt in a tax refund scheme involving pandemic relief credits. Court documents reveal that between October 11, 2022, and May 24, 2023, Kendra Michelle Eley of Norfolk filed eight fraudulent Forms 941 with the IRS for her business Kreative Designs by Kendra, LLC. These forms falsely reported wages and federal tax withholdings for non-existent employees over four tax periods in both 2020 and 2021.
Eley claimed false Sick and Family Leave Credits and Employee Retention Credit under the CARES Act on the forms for 2021, amounting to $713,000 and $252,000 respectively. The total refunds claimed exceeded $900,000. Consequently, two U.S. Treasury checks totaling $649,050 were issued to "Kendra M. Eley, Kendra Cleans Maid Services."
On December 23, 2022, Eley and Rejohn Isaiah Whitehead of Portsmouth opened a business account under Kendra Cleans Maid Services LLC using one of these checks as funding. They misrepresented KCMS as having sixteen employees with an average pay rate of $2,000 each to open this account.
Whitehead pled guilty on February 13 to engaging in monetary transactions involving criminally derived property and is scheduled for sentencing on June 26 with a potential sentence of up to ten years in prison.
Eley pled guilty today to charges of false claims and engaging in monetary transactions involving criminally derived property. Her sentencing is set for July 9 where she faces up to ten years in prison.
"Actual sentences for federal crimes are typically less than the maximum penalties," noted court officials. Sentencing will be determined by a federal district court judge considering U.S. Sentencing Guidelines among other factors.
The announcement was made by Erik S. Siebert, U.S. Attorney for the Eastern District of Virginia, alongside Kareem A. Carter from IRS Criminal Investigation's Washington D.C. Field Office after Senior U.S. District Judge Raymond A. Jackson accepted the plea.
The case is being prosecuted by Assistant U.S Attorneys Therese O'Brien and Mack Coleman.
Further details can be found on the websites of the U.S Attorney’s Office for the Eastern District of Virginia or through PACER using Case No. 4:24-cr-77.