St. Louis Woman Admits $177,000 Pandemic-Era Tax Credit Scheme

ST. LOUIS – A St. Louis, Missouri woman on Thursday admitted fraudulently obtaining $177,000 by falsely claiming tax credits for retaining employees during the COVID-19 pandemic.

Ayana J. Brown, 34, pleaded guilty in U.S. District Court in St. Louis to two felony counts of theft of government property. Brown admitted filing two fraudulent quarterly employment tax returns (IRS Form 941s) with the IRS on behalf of Yaya Flowtiques LLC on Dec. 22, 2022. The filings falsely claimed that the company had 5 employees and paid $177,321.77 and $145,098.88 in wages for the first and second quarters of 2021, respectively. The forms sought Employee Retention Tax Credits, which were designed to encourage businesses to retain employees during the pandemic. Generally, businesses qualified for the ERC if they paid qualifies wages to employees during the pandemic and were shut down by a government order, experienced a 50% decline in gross receipts or qualified as a recovery startup business.

Brown did not have employees or pay wages during this period and the company had little or no operations. Brown had never reported income from Yaya Flowtiques and knew that the forms 941 were false. Based on these fraudulent IRS Forms 941, the IRS issued two U.S. Treasury checks for $97,645.53 and $79,901.40 to Yaya Flowtiques. Brown deposited the checks before making multiple large cash withdrawals and spending the remaining proceeds on personal expenses, food, and shopping.

Brown is scheduled to be sentenced on May 6. Each theft of government property charge is punishable by up to 10 years in prison, a $250,000 fine or both prison and fine.

The Treasury Inspector General for Tax Administration (TIGTA) investigated the case. Assistant U.S. Attorney Jonathan Clow is prosecuting the case.