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Press Release

Fairland Woman who Embezzled from her Employer and Signed a False Tax Return Sentenced

For Immediate Release
U.S. Attorney's Office, Northern District of Oklahoma

A woman who stole nearly $232,000 from her employer over a two-year period and signed a false income tax return was sentenced today in federal court, announced U.S. Attorney Trent Shores.

U.S. District Judge John F. Heil III sentenced Stephanie K. Gragg, 45, of Fairland, to 12 months in federal prison followed by one year supervised release. The judge further ordered Gragg to pay restitution in the amounts of $231,964 to Shangri-La Management LLC and $55,036 to the IRS.

“Stephanie Gragg’s corrupt financial shenanigans have earned her the title of convicted felon. Her employer entrusted her with access to corporate funds, and she took advantage of her position to divert corporate money into her personal accounts and to feed a gambling habit,” said U.S. Attorney Trent Shores. “The agents of IRS-Criminal Investigation, in concert with the FBI, are to be commended for their work. From embezzlement to tax crimes to large scale organized crime, they meticulously follow the money to ensure criminals are brought to account for their crimes.”

“Mrs. Gragg's crimes were not victimless. Every time someone cheats on their taxes, there are more than 300 million victims,” said Mark Pearson, IRS-Criminal Investigation Acting Special Agent in Charge of Dallas Field Office. “Honest taxpayers need to be reassured that everyone is paying their fair share. Together with our law enforcement partners, IRS-Criminal Investigation will continue the pursuit of those who violate our tax system.”

From January 2014 to December 2016, Gragg used her access to Shangri-La Management LLC’s cash collections to take $231,964 in cash funds to enrich herself. She deposited a portion of the embezzled cash into her personal accounts at Arvest Bank to pay for personal and family expenses. She also used a portion of the cash funds to gamble.

Gragg further admitted that she knowingly failed to report on her tax returns the funds that she misappropriated from her employer. For example, Gragg signed, under penalty of perjury, her 2016 Form 1040, U.S. Individual Income Tax Return, in which she failed to report $103,377 in illegally obtained funds.

IRS-Criminal Investigation and the FBI  conducted the investigation. Assistant U.S. Attorney Reagan V. Reininger prosecuted the case.


Public Affairs

Updated February 2, 2021

Financial Fraud