Thursday, February 3, 2011
Department of Justice
United States Attorney William C. Killian Eastern District of Tennessee
KINGSTON RESIDENT PLEADS GULITY TO WIRE FRAUD AND TAX EVASION
KNOXVILLE, Tenn--Jessica Potter Stafford, 33, of Kingston, Tenn., pleaded guilty today to 10 counts of wire fraud and three counts of income tax evasion before the Honorable Thomas W. Phillips, U.S. District Court Judge. Stafford faces a maximum penalty of 20 years in prison and a fine of $250,000 on each wire fraud charge and a maximum penalty of five years in prison and fine of $250,000 on each count of income tax evasion when she is sentenced on May 26, 2011.
According to an information filed in U.S. District Court, Stafford was employed as Director of Administration for several businesses owned by Robert McManus, including Labo Management, LLC and Diverse Concepts located in Knoxville, Tenn. In the course of her employment, she was issued American Express credit cards to be used for the sole purpose of paying expenses relating to her employment duties. Instead, Stafford admitted that she used the credit cards to pay personal expenses.
Stafford admitted that from January 1, 2005, through August 31, 2008, she devised a scheme in which she used the company American Express credit cards to charge more than $200,000 in personal charges at stores such as Kohl's, Markham Diamond, and Lumber Liquidators. The filed plea agreement states that Stafford then paid for the unauthorized charges with McManus' funds.
Stafford admitted that she incurred income that she failed to report on her federal income tax returns for 2006, 2007, and 2008. According to her plea agreement, Stafford failed to report over $405,000 in income during these years, resulting in additional tax due to the United States of over $119,000.
This investigation was conducted by Internal Revenue Service Criminal Investigation. Assistant U.S. Attorney Frank M. Dale, Jr., represented the United States.