Memphis Resident Sentenced on Tax and Embezzlement Charges
Memphis, TN - Venetia Smith, of Memphis, Tennessee, was sentenced on November 23, 2010 by U.S. District Judge S. Thomas Anderson to14 months incarceration, followed by three years supervised release for willful failure to collect or pay over tax and embezzlement in connection with health care, announced Edward L. Stanton, III, U.S. Attorney for the Western District of Tennessee. Smith, who pled guilty to the charges earlier this year, was also ordered to pay $61,291.97 to the IRS, a condition of her plea agreement. She was also ordered to pay $24,948.68 in restitution to The Regional Medical Center at Memphis (The MED).
According to the Information filed for the plea hearing on June 2, 2010, Smith owned VS Payroll and Tax Service, which was contracted by The MED to handle payroll services for the Health Loop, including the preparation and filing of federal employment tax returns and payment of employment taxes to the Internal Revenue Service (IRS) on a regular basis. As part of this contract, Smith was responsible for preparing employee payroll checks and withholding federal income tax, as well as Federal Insurance Contribution Act (FICA) taxes, from the paychecks of The Health Loop employees. Smith was also supposed to pay to the IRS the amount of federal income tax withheld and the total FICA taxes owed, file quarterly Forms 941 with the IRS for The Health Loop, and issue annual Forms W-2 to the employees of The Health Loop. Additionally, Smith admitted that she embezzled more than $84,000 belonging to The MED.
“The United States Attorney’s Office takes charges of this nature very seriously,” said Edward L. Stanton, III, U.S. Attorney for the Western District of Tennessee. “This sentence establishes that this office and the federal courts will not condone an individual’s abuse of a position of trust for his or her own financial gain. In addition, this Defendant’s crime was particularly egregious given that she stole from The MED, which provides irreplaceable and invaluable health care services not only to the Memphis community, but to people throughout the entire Mid South.”
“There are detrimental consequences that this type of crime has with the loss of tax revenue to the United States government and the loss of the future social security or Medicare benefits for the employees,” said Christopher R. Pikelis, Special Agent in Charge, IRS Criminal Investigation, Nashville Field Office. “This sentence should serve as a very loud warning to those individuals who use their positions of trust to carry out illegal activities. IRS Special Agents and our federal law enforcement partners are diligently watching for fraud and abuse and will join forces to take aggressive legal measures against those who have committed it.”
This investigation was conducted by IRS Criminal Investigation and the U.S. Department of Health and Human Services. Assistant U.S. Attorney John D. Fabian represented the government.
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