Kareem Highsmith

Introduction

Kareem Highsmith, a 51-year-old man from Charlotte, North Carolina, has pleaded guilty to making false, fictitious, or fraudulent claims against a government agency — the charge carrying a maximum penalty of five years in prison and a $250,000 fine. In a plea announced by the U.S. Attorney’s Office for the Western District of New York, Highsmith admitted a scheme built on pandemic-era Employee Retention Credits and Paid Sick and Family Leave Credits: he filed fraudulent quarterly tax forms for his own company, collected roughly $77,743.97 on the first false filing and about $324,636.81 across eleven of them, then helped other businesses file their own fraudulent claims and took in approximately $78,700 for the assistance. The total loss from his conduct is put at $3,780,051.87.

Background Information

The credits Highsmith exploited were CARES Act programs. The Employee Retention Credit was a refundable credit businesses could claim in federal tax filings based on qualified wages paid to employees during COVID; the Paid Sick and Family Leave Credit gave businesses with fewer than 500 employees funds to provide paid leave for employees’ own health needs or family care. Both were claimed on IRS Form 941, the quarterly return, and both were meant for businesses with real payrolls — the condition the scheme falsified. Highsmith’s company, CMK Transportation and Delivery Service LLC, is the entity the filings named.

The Controversy or Incident That Led to Their Cancellation

Pleaded guilty; sentencing pending. Kareem Highsmith admitted filing fraudulent pandemic-era tax credit claims for a company with no operations or employees, collecting over $400,000 and selling his method to other businesses, in a scheme the government values at $3.78 million in total loss.

The first filing set the pattern. On July 3, 2022, Highsmith electronically filed a signed Form 941 with the IRS for CMK Transportation and Delivery Service LLC, a company he owned, for the quarter ending June 30, 2020. The form falsely represented that CMK employed four paid people during the quarter and requested total refunds of $84,395.96; the IRS issued a tax refund check for $77,743.97 payable to CMK. In actuality, per the announcement, CMK had no business operations and no employees in the second quarter of 2020 and was entitled to nothing.

He then repeated the filing. Highsmith submitted ten additional Form 941s for CMK, covering the quarters ending September 30, 2020 through December 31, 2022, falsely claiming three or four paid employees on each and requesting total refunds of $799,623.15, of which approximately $324,636.81 was received. He also assisted others in submitting fraudulent Form 941s claiming the same credits — returns seeking approximately $2,452,360.19 in refunds, of which $603,572.21 was paid out to the business owners, with Highsmith receiving roughly $78,700 for helping them file. And between May 8, 2020 and on or about December 28, 2021, he submitted three Paycheck Protection Program loan applications and four Economic Injury Disaster Loan applications for companies he owned including CMK, each containing material misrepresentations about employee counts, gross revenues, or cost of goods sold — seeking $443,672.57 in total and receiving $197,839.57.

The government’s total loss figure for Highsmith’s conduct is $3,780,051.87. The case is part of the Trump Administration’s Task Force to Eliminate Fraud, prosecuted by Assistant U.S. Attorney Douglas A.C. Penrose, and was investigated by IRS Criminal Investigation under Special Agent in Charge Harry Chavis. Sentencing will be scheduled at a later date.

Public Reaction and Consequences

The announcement frames Highsmith as both claimant and enabler: the plea covers his own company’s eleven fraudulent quarterly filings and the paid assistance he provided to other businesses filing claims they were not entitled to. The documented consequences are the felony conviction admitted by plea, the $3.78 million total-loss attribution, and the pending sentencing where the five-year maximum and $250,000 fine will be argued. The refund checks he already received — $77,743.97 on the first filing, $324,636.81 across the CMK filings, $78,700 in assistance fees, and $197,839.57 in pandemic loans — are the documented proceeds.

Geography is part of the case’s record: the filings and the defendant sit in North Carolina, while the prosecution is run from the U.S. Attorney’s Buffalo office in the Western District of New York — a pandemic-fraud case prosecuted far from where it was filed.

Current Status

Highsmith, 51, has pleaded guilty and awaits sentencing, which the announcement says will be scheduled at a later date. The conviction record now carries the fraudulent-claims felony with its five-year statutory maximum, and the government’s $3,780,051.87 loss figure will anchor the restitution and sentencing arguments. The IRS Criminal Investigation that produced the case is closed on the investigative side; the sentencing hearing is the remaining proceeding documented.

Impact on Their Career/Life

Highsmith’s plea closes the operational life of CMK Transportation and Delivery Service LLC as a going concern: the company’s documented payroll for the scheme’s quarters was zero, and its named presence in eleven fraudulent quarterly filings plus a PPP and EIDL application record now belongs to a admitted fraud case. The ERC-assistance side of the scheme — the $78,700 he took from other businesses to file their claims — extends the record beyond his own refunds into aiding others’ fraud, the aggravating fact that drove the total-loss figure to $3.78 million. Sentencing will put a custody number on it; the plea has already put the record on him.

Sources

• U.S. Attorney’s Office, Western District of New York, “North Carolina man pleads guilty to defrauding the government out of hundreds of thousands of dollars,” November 2026. source