SAN JOSE — A former South Bay group residence proprietor pleaded responsible to federal fraud expenses Tuesday, admitting in courtroom that she misappropriated greater than $1.2 million by pocketing her employees’ tax withholdings.
Annie Corbett, 55, additionally admitted to spending public and grant funds meant for foster care assist on private bills together with her timeshare. The longtime Redwood Metropolis resident who information present additionally has a residence in Nebraska entered the plea within the U.S. Northern District Courtroom in San Jose, in line with the U.S. Lawyer’s Workplace.
The costs to which she pleaded, one rely every of wire fraud and willful failure to pay over employment taxes, carry most sentences of 20 years and 5 years in jail, respectively, and as much as a $250,000 nice for every rely. Because the case decision was reached by way of a plea settlement, it's unlikely Corbett’s sentence will method these higher sentencing boundaries.
Her legal professional declined to touch upon the plea, which courtroom filings present had been within the works since a minimum of April.
The U.S. Lawyer’s Workplace initially charged Corbett in October 2020 after an investigation discovered proof of fraud whereas she ran Corbett Group Properties, Inc., which operated three properties within the San Jose space between 2011 and 2018 earlier than the corporate shut down.
Corbett instructed this information group in a 2019 interview that she closed the properties after her firm was denied a state license to handle what are often known as Quick-Time period Residential Therapeutic Applications. She stated that she and her staff, which numbered about 60 a yr, had labored for 2 years ramping as much as meet the packages’ increased care and repair requirements, and thereby preserve the properties working.
In that very same interview, Corbett blamed a disgruntled former bookkeeper for issues she was having with the state, saying the ex-employee tried to blackmail her after being fired, then made phony claims that derailed her licensing bid.
The bookkeeper battle coincides with the time interval throughout which Corbett now says she dedicated fraud. The U.S. Lawyer’s Workplace information launch about Corbett’s responsible plea states that she “admitted that she deceived her bookkeeper and CPA” whereas she pocketed payroll taxes that have been imagined to go to the IRS.
In accordance with the federal investigation — performed by the FBI, IRS Prison Investigation, and the U.S. Division of Well being and Human Companies — Corbett accepted funds from federal and native governments and charities that have been aimed toward supporting foster youngsters, and spent a whole bunch of hundreds of dollars of that cash on herself.
The U.S. Lawyer’s Workplace stated Corbett illegally diverted a complete greater than $550,000 that was spent “for her private enrichment, together with making her personal bank card funds, her individual retail enterprise funds, and her funds on a trip timeshare.”
Corbett additionally admitted in her plea that between 2014 and 2017, she willfully didn't pay $752,165 in payroll taxes, regardless that she nonetheless withheld the requisite tax quantities from her staff’ paychecks, in line with federal prosecutors.
Corbett reportedly diverted the unpaid taxes and public funds by fooling her bookkeeper and tax preparer. Charging paperwork filed in March state that Corbett would offer them copies of checks from the corporate checking account made out to the U.S. Treasury, then later “modified the title of the checks’ payee” and deposited the funds right into a separate “hid” checking account authorities say she used for each enterprise and private bills.
“On this means, Corbett created the looks that taxes had been paid, however she deposited the funds right into a checking account over which she had sole management,” the paperwork state.
Corbett is out of jail custody pending her sentencing listening to scheduled for Jan. 31.
Workers author Julia Prodis Sulek contributed to this report.