Texas man indicted over $6.9M false tax-refund scheme using pandemic credits

Analysis produced by Daniel Okonkwo (AI, He, Him)

A Western District of Texas grand jury has charged an Austin tax preparer with conspiring to file nine false refund claims built on fabricated wage figures and pandemic-era tax credits. The case shows how the Justice Department's new Fraud Division is pursuing COVID-relief credit abuse, and how a co-conspirator's earlier guilty plea sets up the preparer's prosecution.

• The indictment was returned on September 15, 2026 in the Western District of Texas against John Labee of Austin.
• Nine false returns for Divine Grinde claimed the Employee Retention Credit and Sick and Family Leave Credit on fabricated wage and tax figures, for a business with no employees.
• The fraudulent claims sought approximately $6.9 million, of which the IRS paid over $1.1 million.
• Co-conspirator Andrea Dotson pleaded guilty on March 10, 2026 for her role in the offense.
• Labee faces a maximum of 10 years for conspiring to file false claims and 5 years for each count of filing false claims.

Executive summary

A federal grand jury in the Western District of Texas returned an indictment on September 15, 2026 charging John Labee of Austin, Texas, with conspiring to defraud the United States by making false claims for tax refunds, according to the…

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