Husband and Wife Charged With Conspiring To Defraud the United States; Wife Charged With Aiding and Assisting To File False Tax Returns
A Waterford, Michigan husband and wife were arraigned this week on a number of charges including conspiracy to defraud the United States, fraudulent withholdings of records and falsification of records in bankruptcy. In addition, the wife was charged with aiding and assisting the filing of false tax returns, U.S. Attorney Matthew Schneider announced today.
Joining Schneider in the announcement was Manny Muriel, Special Agent in Charge of the Detroit Office of the Internal Revenue Service - Criminal Investigation.
The arraignment was heard before U.S. Magistrate Judge Anthony Patti
According to the indictment, from 2012 through 2015, Stephanie Sumner of Waterford, Michigan was employed as the Director of Elections by the City of Oak Park. Part of her responsibilities there was to submit invoices for payment by the City of Oak Park for election related services. Stephanie Sumner created false City of Oak Park invoices listing her husband, Michael Sumner, as a vendor-payee. Only months before the scheme, in September 2012, the couple filed for Chapter 13 bankruptcy. From about January, 2013 to February 2015, checks from the City of Oak Park totaling over $430,000 in payment of the fraudulent invoices which were deposited by the couple into a shared bank account used by them.
The City of Oak Park generated Forms 1999 (Independent Contractor tax forms) which would have been required to be turned over to the Chapter 13 Trustee as part of their yearly tax information, but they failed to do so. They also did not report the embezzled funds on their 1040 tax form transcripts and 1040s. Stephanie Sumner failed to report the embezzled funds on their 2013, 2014 and 2015 federal tax returns when she knew she should have included them.
The maximum penalty for conspiracy to defraud the United States is imprisonment of no more than five years and a fine of not more than $250,000, while aiding or assisting in filing false tax returns is imprisonment of no more than three years and a fine of no more than $100,000.
An indictment is only a charge and is not evidence of guilt. Every defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
The case was investigated by agents of the Internal Revenue Service – Criminal Investigation. The case is being prosecuted by AUSA John Neal and SAUSA Richard Roble.