PITTSBURGH - A resident of Washington County, Pennsylvania pleaded guilty in federal court to a charge of conspiracy to defraud the Internal Revenue Service, United States Attorney David J. Hickton announced today.
Ann E. Harris, 53, pleaded guilty to one felony count before United States District Judge Mark R. Hornak.
In connection with the guilty plea, the court was advised that during the period from January 2006 through April 15, 2013, Harris knowingly and willfully conspired with another individual to defraud the IRS by impairing the IRS in its assessment and collection of income taxes. As a result of the conspiracy, the tax loss to the IRS was $4,044,946.
Harris was the personal assistant, bookkeeper and secretary to the co-conspirator and performed numerous duties as an employee of the co-conspirator and the co-conspirator’s businesses, including bookkeeping, payroll, accounts receivable and accounts payable. During the period from 2006 through 2013, Harris received wages and bonuses totaling over$1,000,000 and a vehicle for her personal use.
Harris and the co-conspirator used companies owned and controlled by the co-conspirator to fraudulently pay for and unlawfully deduct as business expenses, millions of dollars in personal expenses of the co-conspirator. Harris fraudulently classified personal bills of the co-conspirator as business expenses in the accounting software of the businesses and issued checks drawn on business bank accounts for payment of purely personal expenses of the co-conspirator. Harris entered fabricated account categories for her false entries in the accounting software of the businesses so that they appeared as legitimate business expenses.
The businesses involved in the scheme included Automated Health Systems, Inc.; Automated Health Systems Delaware; Nocito Enterprises, Inc.; Automated Health Services, LLC.; Management Financial Services, Inc.; Golden Triangle Leasing Co., Inc.; Donotti Properties, Inc.; Palace Development Company, Inc.; Northland Properties; and Jonolley Properties. These business entities had offices and addresses in the Western District of Pennsylvania and were effectively controlled or owned by the co-conspirator.
Harris fraudulently classified as business expenses over $27,000,000 in personal expenditures for the co-conspirator’s residential mansion and other personal expenses. The expenditures related to the construction, furnishing and landscaping of the co-conspirator’s multi-million dollar residential mansion, as well as salaries for the co-conspirator’s butler and personal cook. Harris also falsely characterized as business expenses expenditures for the co-conspirator’s exotic automobile collection which included a Mercedes, a Maserati and a Bentley; expenses for the co-conspirator’s country club membership; expenses related to the co-conspirator’s wife’s Jaguar; expenses for private school tuition; and expenses for personal residences for the co-conspirator’s family members.
Judge Hornak scheduled sentencing for April 19, 2016 at 9:30 a.m. The law provides for a maximum total sentence of five years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Pending sentence, the court released Harris on bond.
Assistant United States Attorney Mary McKeen Houghton is prosecuting this case on behalf of the government.
The United States Internal Revenue Service - Criminal Investigation, conducted the investigation leading to the Information in this case.
Source: U.S. Department of Justice, Office of the United States Attorneys
