Erin Patti-Coveyou of Moran, Michigan, pleaded guilty on July 22 to making a false statement on a federal income tax return and agreed to pay $535,605 in owed income taxes. She faces up to three years in federal prison and will be sentenced later this year by Chief United States District Judge Hala Y. Jarbou.
According to the U.S. Attorney for the Western District of Michigan, Patti-Coveyou failed to report $1,666,499.78 in income from 2021 through 2024 when filing her U.S. Individual Income Tax Returns on Form 1040 during those years. In one example cited from 2022, she reported her 2021 income as $353,055 but had actually obtained an additional $279,079.12 from embezzling cash from her employer and gambling activity. For calendar years 2022 and 2024, she underreported her earnings as $39,960; $53,188; and $56,545 while her actual incomes were $424,882; $461,300; and $650,931 respectively.
Patti-Coveyou’s actions resulted in a total federal tax loss of over half a million dollars. She also agreed to repay a total of $1,751,059 that she embezzled from her employer between 2021 and 2025.
U.S. Attorney Timothy VerHey said, “Ms. Patti-Coveyou reported only a small fraction of her income because she was an embezzler, a gambler, and wanted to avoid paying her share of taxes. We cannot tolerate people who lie on their taxes because it undermines the integrity of our tax system. Today’s plea demonstrates my office’s commitment to holding individuals accountable when they choose to break our federal tax laws.”
Robert Kuszynski, Acting Special Agent in Charge at IRS Criminal Investigation Detroit Field Office, said: “Taxpayers thinking about participating in fraudulent tax schemes including failing to report all forms of income should stop in their tracks and simply look at the consequences of taking the next step… Those consequences include going to prison, being branded a convicted felon for the rest of their lives, and paying back all the taxes owed plus steep penalties and interest.”
The case was investigated by IRS Criminal Investigation with prosecution led by Assistant U.S. Attorney Chris O’Connor.
The U.S. Attorney for the Western District of Michigan prosecutes federal crimes such as this case and manages civil litigation for the United States while employing about seventy prosecutors, civil litigators and support staff across offices including Grand Rapids, Marquette, Lansing and Kalamazoo, according to the official website.