Montgomery Man Sentenced to 27 Months in Federal Prison for Wire and Tax Fraud
The Office of the United States Attorney for the District of Vermont, stated that on April 15, 2013, Thomas Smith Jr. 47, of Montgomery, Vermont was sentenced to serve 27 months in federal prison after he pled guilty to wire and tax fraud charges. U.S. District Court Judge William K. Sessions III also ordered Smith to serve one year of supervised release following his prison term. Smith must also pay $374,842.26 in restitution to his former employer, the State Farm Mutual Insurance Company. Smith faced a prison sentence of up to 20 years on the wire fraud charge and up to three years on the tax fraud charge. Judge Sessions found that Smith’s recommended prison term under the federal Sentencing Guidelines was between 27 and 33 months. Smith’s defense attorney asked the court to impose a prison sentence below that range. For its part, the government argued that Smith should receive a 27-month sentence. In determining that a 27-month sentence was appropriate, Judge Sessions considered, among other factors, the fact that Smith violated his victims’ personal and professional trust. Judge Sessions also stated that the sentence imposed was intended to send a message to the community that crimes of this type would not be tolerated.
According to court records, Smith was employed by State Farm from 1992 through 1998 and as an independent contractor authorized to market State Farm financial products from 1999 until 2010. From approximately 2007, until he was caught in 2010, Smith embezzled over $350,000 from State Farm financial accounts that belonged to his client and close personal friend, William Baker, and Mr. Baker’s family members. Smith stole the majority of the money from accounts being held for Mr. Baker’s two minor children. The Baker children had inherited the money in these accounts from their deceased aunt. Smith accomplished his fraudulent scheme by forging checks drawn on the Bakers’ accounts and using the money, without permission, to pay his own family’s personal expenses. Moreover, Smith filed false income tax returns with the Internal Revenue Service. Specifically, Smith failed to report the proceeds of his criminal conduct as taxable income.
When Smith’s conduct was discovered, State Farm reimbursed the Baker family for the money they had lost. For this reason, Judge Sessions ordered Smith to pay restitution directly to State Farm. United States Attorney Tristram J. Coffin commended the Internal Revenue Service, and the Vermont State Police their hard work on this investigation. The prosecutor is Assistant United States Attorney Timothy C. Doherty, Jr. The defendant is represented by Attorney Douglas G. Kallen from the Burlington law firm Bergeron Paradis & Fitzpatrick.