KINGSPORT, TN – A Tennessee man has pleaded guilty to tax and wire fraud charges for his role in a scheme that sought approximately $3.4 million in fraudulent COVID-19-related tax refunds.
According to court documents and statements made in court, Edward Zanes, of Kingsport, conspired with others to exploit pandemic-era tax credits by creating phony businesses with no actual operations or employees. The fraudulent entities were used to file false tax returns claiming refunds through the employee retention credit and the paid sick and family leave credit—programs designed to support businesses during the pandemic.
Zanes assisted in preparing and filing multiple false tax returns and ensured they were sent to addresses he and his co-conspirators controlled. In total, the conspirators claimed over $3.4 million in tax refunds and received more than $1.8 million from the IRS.
Zanes is scheduled to be sentenced on January 7, 2026. He faces a maximum of 20 years in prison for conspiracy to commit mail and wire fraud, up to 20 years for each count of mail fraud, and up to 3 years for each count of aiding and assisting in the filing of a false tax return. The final sentence will be determined by a federal district court judge.
The investigation was conducted by IRS Criminal Investigation and the U.S. Secret Service. The case is being prosecuted by Trial Attorney Zachary A. Cobb of the Justice Department’s Tax Division and Assistant U.S. Attorney Mac Heavener for the Eastern District of Tennessee.
