Craig S. Morford
United States Attorney
Eli J. Richardson
Assistant U.S. Attorney
(615) 736-2124
BOOKKEEPER PLEADS GUILTY TO BANK FRAUD
AND TAX EVASION BASED ON BILKING CLIENTS
OUT OF HUNDREDS OF THOUSANDS OF DOLLARS
Nashville, TN – July 10, 2007 – Craig S. Morford, U.S. Attorney for the Middle District of Tennessee, and Cleve Daniels, Special Agent in Charge (SAC), Internal Revenue Service-Criminal Investigation, announced that Mary K. Barber, of Clarksville, Tennessee, has pled guilty to bank fraud and income tax evasion in connection with embezzling hundreds of thousands of dollars from clients for whom she performed bookkeeping services. Barber pled guilty today to both counts of a two-count Information, before United States District Judge Aleta Trauger.
In her plea agreement, Barber admitted the key facts regarding both the crimes to which she pled guilty and additional criminal activity that is relevant in determining her sentence. Barber engaged in a scheme to steal and embezzle funds from four businesses and two individuals, and then evaded payment of income tax on the funds she received from her theft and embezzlement.
Barber engaged in a scheme to steal and embezzle funds from an individual (R.R.), as well R.R.’s interior design firm. R.R. hired Barber, then doing business as NUNYA BUSINESS, in January 2005, as a bookkeeper on an independent contractor basis. Barber was to be responsible for, among other things, handling payroll and payroll taxes for the interior design firm. Between approximately February 2005 and November 2005, Barber fraudulently and without authorization issued, and caused to be paid, numerous checks drawn on the business checking account, in the amount of $63,667.47 total. Barber generally accomplished this, depending on the check, by some combination of forging R.R.’s signature on the check, making the check payable to herself or NUNYA BUSINESS, making the check out to another payee and then forging the payee’s endorsement, making the check payable to third parties of Barber’s choosing, and/or having the check deposited into an account controlled by her or a close relative.
Barber executed such scheme to defraud in numerous ways on numerous occasions. One such occasion occurred on or about July 21, 2005, when Barber, without authorization, deposited into her NUNYA BUSINESS account a $17,500 check drawn on the business checking account.
In about November 2005, the interior design firm’s business checking account (as well as R.R.’s personal bank account) was switched to a different bank. When the bank from which the account was switched issued checks to close these accounts, Barber stole these checks, in the amount of $6,182.73 and deposited them into her own account. Then, between November 2005 and April 2006, Barber likewise fraudulently and without authorization issued, and caused to be paid, numerous checks drawn on the new account, in the amount of $16,165.41 total.
Barber also made a large number of unauthorized purchases on the interior design firm’s credit card account, for personal purposes and without authorization, in the total amount of $21,468.37. Barber also defrauded R.R. individually by forging R.R.’s signature on two personal checks of R.R., and depositing them into NUNYA BUSINESS’ bank account.
In addition, Barber gained physical access to blank checks drawn on an investment account of R.R., and between February 2005 and January 2006, fraudulently and without authorization issued numerous checks drawn on the investment account, totaling $76,622.41, and caused them to be paid for her benefit.
The second client business from which Barber stole and embezzled funds was a Tennessee limited liability company (LLC) which operated a retail antique store in Williamson County, Tennessee. Between July 2005 and March 2006, Barber embezzled $11,182.65 from the antique store by taking checks drawn on the antique store’s checking account and either cashing them or depositing them without R.R.’s or her partners’ knowledge or authorization.
The third client business from which Barber stole and embezzled funds was a Florida LLC which operated a sewing business in Williamson County, Tennessee. Between September 2005 and January 2006, Barber embezzled $42,060.45 from the Florida LLC by depositing checks drawn on the sewing company’s account into NUNYA BUSINESS’ bank account; such deposits were fraudulent in that Barber either acted without any authority or forged an endorsement.
The fourth client business from which Barber stole and embezzled funds was hair salon in Cheatham County, Tennessee. Between December 2004 and March 2006, Barber embezzled $41,193.88 from the hair salon’s account by, depending on the particular check involved, making a check payable to herself or NUNYA BUSINESS without any authorization or basis whatsoever, making the check payable to third parties of Barber’s choosing, or depositing a check payable to a third party into NUNYA BUSINESS’ account after forging the third party’s endorsement.
The plea agreement also sets forth the pertinent facts regarding Barber’s tax evasion. When Barber filed her federal income tax return for the calendar year 2005, she intentionally failed to report $224,946.88 of income she had received by her acts of bank fraud, including the income referenced above. She also intentionally failed to report additional income, including cash she stole from her clients. As a result of Barber’s failure to report such income, the United States suffered a tax loss of $64,342.00. The plea agreement also details certain income that Barber received from embezzlement during 2004 and 2006, and then intentionally omitted on her tax returns for 2004 and 2006.
Based on this criminal activity, Barber originally was charged separately by state prosecutors in Cheatham, Davidson and Williamson Counties. U.S. Attorney Morford praised law enforcement agencies in each county for their investigative and prosecutive efforts, and for their cooperation with the U.S. Attorney’s Office in deferring state prosecution to allow the federal prosecution to proceed.
“Tax evasion is a serious crime against the American public. All income, regardless of the source, is fully taxable and the IRS is committed to investigate and recommend for prosecution those who do not fully pay their federal taxes,” said SAC Daniels.
Judge Trauger scheduled Barber’s sentencing hearing for October 15, 2007.
This investigation was conducted by Internal Revenue Service-Criminal Investigation. Assistant U.S. Attorney Eli Richardson represented the government.