June 6, 2011
Department of Justice
United States Attorney William C. Killian Eastern District of Tennessee
KINGSTON RESIDENT SENTENCED ON WIRE FRAUD AND TAX EVASION CHARGES
KNOXVILLE, Tenn--Jessica Potter Stafford, 34, of Kingston, Tenn., was sentenced on Friday, June 3, 2011, by the Honorable Thomas W. Phillips, U.S. District Court Judge to serve 27 months in prison, followed by three years supervised release. Judge Phillips also ordered Stafford to pay restitution of $119,310.00, to the Internal Revenue Service (IRS) and $111,794.35, to Robert McManus. Stafford also is required to pay a special assessment of $1,300.00 to the court.
Stafford pled guilty on February 3, 2011, to 10 counts of wire fraud and three counts of income tax.
P According to court documents, 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. 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.
“Individuals who are entrusted with credit cards of others, must know that the use of these credit cards for an illegal purpose is wire fraud. Of course, failure to pay federal income taxes is a criminal offense. The U.S. Attorney’s Office continues to prosecute these cases to the fullest extent of the law, “ said U.S. Attorney Bill Killian.This investigation was conducted by IRS Criminal Investigation. Assistant U.S. Attorney Frank M. Dale, Jr., represented the United States.