Two Men Indicted in $3 Million Tax Fraud Scheme Exploiting COVID-Era and Fuel Tax Credits

ST. PAUL, Minn. – A federal grand jury has indicted two men, Henry Remington Herod, 42, of Minneapolis, and Matthew McDowell, 44, of Port Allen, Louisiana, on charges of orchestrating a complex tax fraud scheme that sought to bilk the U.S. government out of over $3 million. U.S. Attorney Andrew M. Luger announced the 10-count indictment, alleging a conspiracy to defraud the United States and the filing of numerous false tax claims.

The indictment details a scheme that spanned from approximately April 2022 to May 2023, during which Herod and McDowell allegedly prepared and filed fraudulent federal income tax returns on behalf of themselves and others. These returns were riddled with fabricated information, including false employment details, inflated income figures, and bogus tax credit claims, all designed to generate substantial tax refunds to which the filers were not legally entitled.

According to court documents, the duo’s tactics shifted over the course of the alleged conspiracy. For the 2021 tax year, Herod focused on exploiting the refundable sick and family leave tax credits. These credits were introduced as part of the government’s response to the COVID-19 pandemic, intended to support self-employed individuals who were unable to work due to the virus or related caregiving responsibilities. Herod allegedly fabricated circumstances to make it appear as though filers qualified for these credits when they did not.

By the 2022 tax year, the scheme evolved, with Herod and McDowell allegedly turning their attention to refundable tax credits for federal taxes paid on fuel supposedly used for off-highway business purposes. This credit is typically claimed by farmers or others who use fuel in vehicles not driven on public roads. The indictment alleges that Herod and McDowell filed returns falsely claiming these credits, further inflating the requested refunds.

In total, the pair is accused of filing 115 fraudulent federal income tax returns, seeking a staggering $3,032,839 in refunds to which the filers were not entitled.

Herod faces a total of ten charges, including one count of conspiracy to defraud the United States and nine counts of making false claims. McDowell is charged with one count of conspiracy to defraud the United States. Both men have made their initial appearances in U.S. District Court, with Herod appearing on December 12, 2024, and McDowell on December 26, 2024. They were released pending further court proceedings.

The case is the result of an investigation by the IRS Criminal Investigation division, which specializes in uncovering complex financial crimes. Assistant U.S. Attorney Matthew C. Murphy is leading the prosecution.

Authorities emphasize that an indictment is merely an allegation, and both Herod and McDowell are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.