Bank Employee Pleads Guilty to Embezzling as Much as $1 Million
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a woman employed by a Kansas City, Mo., bank pleaded guilty in federal court today to stealing up to $1 million from her employer and to failing to pay taxes on the embezzled income.
Jennifer Regans, 39, of Kansas City, Mo., waived her right to a grand jury and pleaded guilty before U.S. Chief District Judge Greg Kays to a federal information that charges her with embezzlement by a bank employee and filing a false tax return.
Regans was employed as an administrative assistant by Pioneer Services, the military banking division of MidCountry Bank in Kansas City, Mo. Pioneer Services is a finance company that exclusively serves the military community, providing unsecured loans, promoting financial literacy and other financial services. Regans was terminated on July 18, 2012, after the embezzlement was discovered.
By pleading guilty today, Regans admitted that she embezzled at least $500,000 from her employer from Nov. 30, 2007, to July 2, 2012. The government believes the actual loss amount may be as much as $1,013,980. Regans also admitted that she did not pay taxes on the embezzled funds, although the IRS concluded that she should have paid a total of at least $139,746 in federal income taxes during that time frame.
As an administrative assistant, Regans had access to an administrative credit card account for charging company expenses related to her duties. Regans admitted that she embezzled $84,989 via her corporate American Express card and that she purchased another $75,380 worth of American Express gift cheques that were deposited to her personal bank accounts. Pioneer Services found that she embezzled $828,045 on her American Express corporate card. The federal investigation matched up Regans’ expenses against the expenses she listed in the company ledger, and noted which entries were altered. The total amount that the government argues that she certainly embezzled is at least $575,114. The total amount of possible fraud, adding in the charges the company deemed fraudulent (but the government was unable to confirm), is $1,013,980. The actual amount of loss and the actual amount of taxable income that was unreported will be left open for the court to determine at Regans’ sentencing hearing.
According to today’s plea agreement, Regans’ fraud was discovered when the bank received a notice from American Express about a past due corporate credit card that was held by Regans. The accounting department noted that Regans had several apparent personal charges on her corporate credit card and an audit was conducted. The audit revealed that Regans had been making personal expenditures on her corporate American Express since 2007. She then submitted cost allocation reports that disguised her personal expenses as business in nature. The statement balances and sums of the application spreadsheets submitted by Regans were identical, but the description of the expenses did not match.
Regans self-prepared her federal income tax returns from 2008 to 2012 and submitted them online. The embezzled funds were knowingly omitted from Regans’ federal income tax returns, which resulted in an additional tax due and owing of $139,746 based upon the government’s position that she embezzled at least $575,114.
Under federal statutes, Regans is subject to a sentence of up to 33 years in federal prison without parole, plus a fine up to $1.1 million and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Daniel M. Nelson. It was investigated by IRS-Criminal Investigation.