A pair from Hampton Roads has admitted guilt in a tax refund scheme linked to pandemic relief credits. The court documents reveal that between October 11, 2022, and May 24, 2023, Kendra Michelle Eley of Norfolk filed fraudulent Employer’s Quarterly Federal Tax Returns with the IRS for Kreative Designs by Kendra, LLC using the EIN for Kendra Cleans Maid Service. Eley falsely reported wages and tax withholdings for nonexistent employees across four tax periods in both 2020 and 2021.
Eley's filings led to claims for Sick and Family Leave Credits and Employee Retention Credit under the CARES Act totaling approximately $713,000 and $252,000 respectively. This resulted in claimed refunds exceeding $900,000. Consequently, the IRS issued two Treasury refund checks to "Kendra M. Eley, Kendra Cleans Maid Services" amounting to $649,050.
On December 23, 2022, Eley and Rejohn Isaiah Whitehead of Portsmouth opened a business account under KCMS with both as signatories. They misrepresented KCMS as having sixteen employees with an average pay rate of $2,000 each. One refund check was deposited into this account. Eley later wrote checks from this account to Whitehead totaling $60,000.
Whitehead pleaded guilty on February 13 to engaging in monetary transactions involving criminally derived property. His sentencing is set for June 26 where he could face up to ten years in prison. Eley pleaded guilty today to charges of false claims and similar monetary transactions; her sentencing is scheduled for July 9 with a possible sentence of up to ten years.
Federal sentences often fall below maximum penalties as determined by district court judges considering guidelines and statutory factors.
The announcement was made by Erik S. Siebert, U.S. Attorney for the Eastern District of Virginia, alongside Kareem A. Carter from the IRS Criminal Investigation division after Senior U.S. District Judge Raymond A. Jackson accepted the plea deal.
Assistant U.S. Attorneys Therese O'Brien and Mack Coleman are leading the prosecution efforts.
For more information or related court documents refer to resources available on websites associated with the U.S Attorney’s Office for the Eastern District of Virginia or search PACER using Case No. 4:24-cr-77.
