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Former CFO Of brokerage company guilty of embezzling
$2 million over a two year period and tax evasion. Money supported a family owned business, personal expenses and gambling activity
From U.S. Attorney's Office
U.S. Department of Justice, Western District of Kentucky
LOUISVILLE, KY - (Fri 3 Nov 2017 - The former Chief Financial Officer of Market Finders Insurance Corporation, pleaded guilty in United States District Court yesterday afternoon, before Magistrate Judge Dave Whalin, to tax evasion and embezzling nearly $2,000,000 during a two year period announced United States Attorney Russell M. Coleman.
Sylvia Rebecca Smith, 63, of Louisville, was charged by Information with one count of wire fraud for devising an embezzlement scheme to obtain money from her employer, Market Finders Insurance Corporation ("Market Finders") and then diverting those funds to PBS Insurance Underwriting Corporation, and two counts of failing to report embezzled funds as income on her tax returns. At the time, Smith was the bookkeeper for PBS Insurance and her husband was the sole owner.
According to the plea agreement, Smith admitted that from July of 2013 through April of 2015, while employed as CFO of Market Finders, she generated fraudulent loan checks from her employer and diverted it into the bank account of PBS.
Specifically, during the relevant time period, the defendant devised a scheme to embezzle funds from Market Finders and Market Finders Insurance Premium Budget Corp. ("Market Finders Premium Budget"), a subsidiary of Market Finders, by creating fraudulent insurance financing contracts between Market Finders Premium Budget and existing insurance clients of PBS Insurance without the knowledge of those existing clients. Smith admitted to manipulating the records so that her theft of funds would not be detected by her employer.
Smith admitted that she and her husband used a portion of the fraudulent loan proceeds to fund her husband's business and to pay for personal expenses for herself and her husband and to pay for gambling activity.
Further, Smith used a portion of the proceeds to make payments on the previous loans she had falsely created from Market Finders Premium Budget. When the scheme was discovered by Market Finders and brought to an end, Smith had not repaid approximately $674,093.
Additionally, Smith admitted to failing to report approximately $258,504 in embezzled funds as income for tax year 2013 and omitted approximately $514,696 in embezzled funds as income for tax year 2014 on Form 1040 of the U.S. Individual Income Tax Return.
At sentencing, Smith agreed to pay $674,093 restitution and could be sentenced to no more than 26 years in prison. Smith was released from federal custody on a $25,000 bond and is scheduled for sentencing before Chief Judge Joseph H. McKinley, Jr. on February 5th, in Louisville.
This case is being prosecuted by Assistant United States Attorney Stephanie Zimdahl and is being investigated by the Louisville Metro Police Department, the Internal Revenue Service, and the Federal Bureau of Investigation.
This story was posted on 2017-11-06 04:32:40
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