Edward Zanes, a resident of Kingsport, Tennessee, has pleaded guilty to a scheme involving COVID-19 employment tax fraud. The crime, which took place in the midst of the global pandemic, involved Zanes and his co-conspirators filing false tax returns seeking refunds based on the employee retention credit and paid sick and family leave credit.
According to court documents, Zanes and his co-conspirators created phony businesses that lacked any employees or operations, solely for the purpose of claiming the bogus credits. Zanes then aided in filing numerous false tax returns for those businesses, directing the returns to be mailed to addresses he and his co-conspirators controlled.
The scheme resulted in false tax returns claiming over $3.4 million in tax refunds, with Zanes and his co-conspirators receiving over $1.8 million from the IRS. This egregious case of tax fraud has left many wondering about the extent of the issue and the measures being taken to prevent it.
Zanes is set to be sentenced on January 7, 2026. He faces a maximum penalty of 20 years in prison for conspiring to commit mail and wire fraud, a maximum penalty of 20 years in prison for each count of mail fraud, and a maximum penalty of 3 years in prison for each count of aiding and assisting in the filing of a false tax return.
The investigation into Zanes’ scheme was conducted by the IRS Criminal Investigation and the U.S. Secret Service. Trial Attorney Zachary A. Cobb of the Justice’s Tax Division and Assistant U.S. Attorney Mac Heavener for the Eastern District of Tennessee are prosecuting the case.
Zanes’ actions are a stark reminder of the importance of tax integrity and the consequences of violating it. As the nation continues to grapple with the aftermath of the pandemic, cases like Zanes’ serve as a warning to those who would seek to exploit the system for personal gain.
Defendant: Edward Zanes
Criminal Charges: Conspiring to commit mail and wire fraud, mail fraud, and aiding and assisting in the filing of a false tax return
City and State: Kingsport, Tennessee
Date: January 7, 2026 (sentencing)
Sentence: TBA
Dollar Amounts: $3.4 million (claimed tax refunds), $1.8 million (received from the IRS)
Related Federal Cases
- Academy Packing Co, Wire Fraud, Michigan 2002 · Alabama
- Barbara Butler, Wire Fraud and Tax Evasion, Tennessee 2024 · New Hampshire
- Memphis Women Sentenced for Tax Fraud Scheme · Tennessee
- Israel Brito-Rodriguez, Tax Refund Scheme, Tennessee 2017 · Tennessee
- Ryan Glidewell, COVID-19 Employee Retention Credit Fraud, Tennessee 2024 · Tennessee
Key Facts
- State: Tennessee
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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