U.S. Attorney for the Western District of Michigan Timothy VerHey today announced that Erin Patti-Coveyou, age 36, of Moran, Michigan, pleaded guilty to one count of making a false statement on a federal income tax return.
She faces a maximum of three years in federal prison and will pay full restitution to the Internal Revenue Service, calculated at $535,605. Patti-Coveyou will be sentenced later this year by the Honorable Hala Y. Jarbou, Chief United States District Judge.
From 2021 through 2024, Patti-Coveyou failed to report $1,666,499.78 of income to the Internal Revenue Service when she filed false U.S. Individual Income Tax Returns on Form 1040 in each of those years. For example, in 2022, she falsely reported her 2021 income was $353,055.
In fact, she had obtained an additional $279,079.12 of income from embezzling cash from her employer and her gambling activity.Additionally, for calendar years 2022 and 2024, she underreported her income as $39,960; $53,188; and $56,545, when in fact her true income in those years was $424,882; $461,300; and $650,931, respectively. Her failure to report income resulted in a total federal income tax loss of $535,605. Patti-Coveyou also agreed to repay a total of $1,751,059 that she embezzled from her employer between 2021 and 2025.
U.S. Attorney VerHey stated, “Ms. Patti-Coveyou reported only a small fraction of her income because she was an embezzler, a gambler, and wanted to avoid paying her share of taxes. We cannot tolerate people who lie on their taxes because it undermines the integrity of our tax system. Today’s plea demonstrates my office’s commitment to holding individuals accountable when they choose to break our federal tax laws.”
“Taxpayers thinking about participating in fraudulent tax schemes, including failing to report all forms of income, should stop in their tracks and simply look at the consequences of taking the next step,” said Robert Kuszynski, Acting Special Agent in Charge, Detroit Field Office, IRS-CI. “Those consequences include going to prison, being branded a convicted felon for the rest of their lives, and paying back all the taxes owed plus steep penalties and interest.”
This matter was investigated by IRS Criminal Investigation, the law enforcement arm of the Internal Revenue Service. Assistant U.S. Attorney Chris O’Connor is prosecuting it.
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