FORMER MELLON BANK SUPERVISOR PLEADS GUILTY IN TAX RETURN SHREDDING CASE
United States Attorney Mary Beth Buchanan announced today, June 7, 2007, that Denise Philpott, a resident of Glenshaw, Pennsylvania, pleaded guilty in federal court to a charge of theft of government property. The charge stems from an investigation into the destruction of thousands of tax returns and remittances in April 2001 by employees of Mellon Bank in Pittsburgh.
Philpott, age 52, pleaded guilty to one count before United States District Judge Gary L. Lancaster.
In connection with the guilty plea, Assistant United States Attorney Margaret E. Picking advised the court that in April 2001, Mellon Bank held a contract to process tax returns and remittances for the Internal Revenue Service in Pittsburgh. The processed checks were to be deposited in a U.S. Treasury Account, and the tax returns were to be sent to the IRS, Andover Service Center, in Andover, Massachusetts. Under the lockbox contract, Mellon was required to meet a program completion date (PCD) of midnight, April 29, 2001, for the processing of tax returns, vouchers and payments received at Mellon Bank in Pittsburgh. Timely completion of the work would have enabled Mellon Bank to avoid penalties and fines, and obtain renewal of the lockbox agreement.
In April 2001, approximately 77,000 U.S. tax returns and payments, valued at $1.3 billion, were hidden and later destroyed by Mellon employees to give the false appearance of meeting the project completion date of April 29, 2001. The directive to destroy the tax returns and payments was conveyed by Supervisor Philpott.
Judge Lancaster scheduled sentencing for Friday, October 5, 2007, at 1:30 p.m. The law provides for a total sentence of ten (10) years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the criminal history, if any, of the defendant.
The Treasury Inspector General for Tax Administration and the United States Postal Inspection Service conducted the investigation that led to the prosecution of Denise Philpott.
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