Candies Goode-McCoy Sentenced to 54 Months in Federal Prison for $98 Million ERC Fraud Scheme

Nevada Tax Return Preparer Gets 4.5 Years for COVID Credit Fraud

On April 8, 2026, Candies Goode-McCoy of Las Vegas, Nevada was sentenced in federal court to 54 months in federal prison and three years of supervised release for her role in one of the largest Employee Retention Credit (ERC) fraud schemes prosecuted to date. U.S. District Court for the District of Nevada also ordered her to pay $26,022,188 in restitution to the Internal Revenue Service. The Justice Department announced the sentencing alongside prosecutions of other COVID relief fraud cases representing more than a half-billion dollars in losses to American taxpayers.

The case is a landmark moment in the federal government's relentless crackdown on ERC abuse—and a vivid illustration of how quickly a tax credit scheme can spiral from opportunistic fraud into a federal criminal prosecution with years of prison time and tens of millions in restitution obligations. If you or your business filed ERC claims and have concerns about their accuracy, consulting with a criminal tax defense attorney immediately is no longer optional—it is urgent.

What Goode-McCoy Did: The Anatomy of a $98 Million ERC Scheme

According to court documents and statements made in open court, Candies Goode-McCoy exploited two COVID-era tax relief programs that Congress created to support legitimate businesses during the pandemic: the Employee Retention Credit (ERC) and the Paid Sick and Family Leave Credit. Both programs were designed to reimburse qualifying employers for wages paid during government shutdowns or periods when their workers were ill with COVID-19.

Between approximately June 2022 and September 2023—long after the initial pandemic emergency—Goode-McCoy filed more than 1,200 federal tax returns on behalf of her own businesses and those of paying clients. Each return falsely claimed these COVID credits, and together they sought refunds totaling more than $98 million from the United States Treasury.

The IRS, processing a historic backlog of ERC claims, ultimately paid out approximately $33 million before the fraud was detected. Of that, Goode-McCoy personally pocketed over $1.3 million in fraudulent refunds. She also collected approximately $800,000 in fees from clients who paid her to file these false returns on their behalf.

What did she do with the proceeds? Court documents describe a lifestyle of conspicuous consumption: luxury vacations, high-end automobiles, luxury goods, and casino gambling—a spending pattern that investigators use as a classic indicator of proceeds from fraud, and one that almost certainly drew additional scrutiny from IRS Criminal Investigation (IRS-CI) agents.

The Federal Charges: 18 U.S.C. § 286

Goode-McCoy pleaded guilty to one count of conspiracy to defraud the government with respect to claims, in violation of 18 U.S.C. § 286. This statute specifically targets conspiracies to obtain money from the United States through false, fictitious, or fraudulent claims—making it the natural vehicle for prosecuting tax refund fraud at scale.

Unlike the more commonly cited tax evasion statute (26 U.S.C. § 7201) or false return statute (26 U.S.C. § 7206(1)), a § 286 conspiracy charge carries a maximum of ten years in prison per count—significantly higher than the five-year maximum for a single count of filing a false return under 7206. Prosecutors routinely use conspiracy charges in multi-return fraud cases because: (1) they aggregate all co-conspirators' conduct under a single theory of liability, (2) they allow the government to prove joint liability for fraudulent returns filed by others in the scheme, and (3) the higher statutory maximum provides greater leverage for plea negotiations and sentencing.

The return preparer liability dimension here is critical. Clients who paid Goode-McCoy to file fraudulent returns are not necessarily in the clear. IRS Criminal Investigation routinely targets participants in return preparer fraud schemes—both the preparer and the clients who submitted false claims, even if those clients believed (or claim to have believed) the returns were legitimate.

The Sentence: 54 Months, $26 Million in Restitution

The 54-month sentence—4.5 years of actual incarceration—represents a significant but not maximum sentence for a fraud involving nearly $100 million in attempted losses and $33 million in actual losses. Under the U.S. Sentencing Guidelines, tax loss is the primary driver of offense level calculations for tax crimes (U.S.S.G. § 2T1.1). A tax loss of $33 million alone produces an offense level of 24 (base level 6 plus 18-level enhancement for loss over $25 million). With adjustments for sophisticated means, role in the offense, and acceptance of responsibility for pleading guilty (typically a 2 to 3-level reduction), the resulting guidelines range for a first-time offender would be roughly 51 to 63 months—precisely the range Goode-McCoy's 54-month sentence falls in.

Beyond imprisonment, the court ordered $26,022,188 in restitution—the amount the IRS actually paid out that has not been recovered. Restitution in federal tax cases is mandatory under 18 U.S.C. § 3663A and follows the defendant for life; it survives bankruptcy and accumulates interest. For Goode-McCoy, this debt will follow her well beyond her release from federal custody.

She also received three years of supervised release, during which she will be subject to federal supervision, financial reporting requirements, and restrictions on engaging in any financial or tax preparation business.

Badges of Fraud: How Investigators Saw Through the Scheme

From a criminal tax defense perspective, the Goode-McCoy case is almost textbook in the fraud indicators—what tax attorneys call badges of fraud—that would have signaled to experienced ERC fraud defense counsel that this scheme was headed toward a catastrophic outcome.

• Volume and Speed: Filing 1,200+ returns seeking nearly $100 million in refunds between June 2022 and September 2023 is not the behavior of a tax practitioner making good-faith errors. The sheer volume creates a statistical signature that IRS automated systems and CI agents are specifically trained to detect.
• Timing: The scheme ran in 2022-2023, after the IRS had already begun publicly warning of ERC fraud and had implemented enhanced review procedures. Any competent advisor should have known by mid-2022 that the ERC space was under intense federal scrutiny.
• Cash Extraction and Lifestyle Spending: Converting fraudulent refunds into luxury goods, vacations, and casino play creates a financial trail that directly confirms willful knowledge. These are not the actions of someone who believed their filings were legitimate.
• Third-Party Return Preparation for Fees: Charging clients to file ERC claims—particularly large-scale, fee-based operations—is precisely the model that drew IRS-CI referrals, grand jury subpoenas, and ultimately indictments across the country in 2023-2026.
• Fictitious Eligibility: Properly claiming the ERC required businesses to have experienced a full or partial suspension of operations due to government orders, or a significant decline in gross receipts. Fabricating this eligibility for 1,200 businesses is not a rounding error—it is willful fraud.

Where Criminal Tax Counsel Could Have Changed the Outcome

The critical intervention points in this case came years before Goode-McCoy stepped into a federal courtroom. A criminal tax defense attorney reviewing this situation in 2022 or early 2023 would have recognized several opportunities to limit—or completely avoid—criminal exposure:

1. Pre-Filing Legal Review. Before filing a single ERC claim for a client's business, a qualified criminal tax attorney or a CPA working under Kovel privilege could have assessed whether the underlying businesses actually qualified. The ERC eligibility rules are complex; determining qualification requires documented analysis of business operations, payroll records, and applicable government orders—not a rubber-stamp process designed to maximize refund volume.

2. Early Voluntary Disclosure. Had Goode-McCoy consulted with criminal tax defense counsel in the early stages of the scheme and understood the exposure she faced, the IRS Voluntary Disclosure Program (VDP) offered a potential path to resolve the matter with reduced criminal exposure. VDP is not a get-out-of-jail-free card, but for taxpayers who proactively come forward, disclose fully, and cooperate, it historically has resulted in civil penalties rather than criminal prosecution. That window closed permanently the moment IRS-CI opened a criminal investigation.

3. Response to IRS Contacts. When a taxpayer or preparer files 1,200 fraudulent returns seeking $98 million, the IRS does not quietly approve them and move on. At some point, Goode-McCoy almost certainly received inquiries, correspondence, or learned that refunds were being held. How you respond to an IRS target letter or a visit from an IRS Special Agent at that stage can be the difference between a civil resolution and a federal indictment.

The Broader Enforcement Warning for ERC Claimants

Goode-McCoy's case is not an isolated prosecution—it is part of a systematic, coordinated enforcement wave. The IRS has publicly stated that it is working through tens of thousands of ERC claims filed during 2022-2023, has issued thousands of disallowance notices, and has referred hundreds of cases to IRS-CI for criminal investigation. The Justice Department's creation of the National Fraud Enforcement Division in April 2026 specifically signals an escalation in federal prosecution of COVID-era benefit fraud, including ERC claims.

If you filed ERC claims—even through a third-party advisor who assured you the filings were valid—and you have since received an IRS notice, audit letter, or any contact from IRS Criminal Investigation, you are potentially in Goode-McCoy's position, not your advisor's. The government will investigate whether you had reason to know the claims were false, regardless of who prepared the returns.

Do not wait for the knock on the door. Consult with a criminal tax attorney in Nevada or wherever you are located before making any statements to federal agents, responding to IRS correspondence about ERC claims, or taking any further action. The facts of the Goode-McCoy case demonstrate exactly how quickly a tax credit filing strategy becomes a federal criminal matter—and exactly how much is at stake when it does.

Take Action Before It's Too Late

The Candies Goode-McCoy sentencing should serve as a stark warning to anyone who filed aggressive or unsupported ERC claims: federal prosecutors and IRS Criminal Investigation are actively pursuing these cases, and a 54-month prison sentence with $26 million in restitution is not an outlier outcome—it is a guideline-driven result for fraud at this scale.

If you are under investigation, have received any contact from IRS Criminal Investigation, or have concerns about ERC or other COVID-era tax filings, contact Brightside Tax Relief immediately for a confidential consultation. Do not speak to IRS Special Agents, DOJ attorneys, or any federal investigators without experienced criminal tax defense counsel by your side. The decisions you make in the first hours and days of a federal tax investigation are often the most consequential ones you will ever face.