LITTLE ROCK-Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, and Tracey D. Montaño, Internal Revenue Service (IRS) Special Agent in Charge, announced today that a federal jury found Lynn Alisa Espejo, 52, of Sherwood, guilty on 15 counts of wire fraud, 6 counts of money laundering, and 4 counts of willfully making and subscribing a false income tax return, all a result of a scheme in which Espejo stole more than $600,000 from her employer.
United States District Judge Kristine G. Baker presided over the seven-day trial, which concluded Wednesday with the jury verdict. Espejo will be sentenced by Judge Baker at a later date.
Espejo served as office manager for Practice Management Services, Inc. (PMSI) and Blanford Medical Services, Inc. (BMSI), corporations that administered business expenses for doctors in Little Rock, from March 2007 through October 2010. The United States presented evidence which proved that Espejo stole approximately $611,099 by wire transfer from PMSI and BMSI to her personal bank accounts while she was employed. Espejo misrepresented these transactions in the accounting software Quickbooks and concealed the wire transfers from the doctors and their accountant. Dr. Paul Zelnick, Dr. James Thrasher, Dr. Bruce Sanderson, and Dr. Scott Brown testified that Espejo was not authorized to take the money, which was consistent with the evidence and the verdict.
"The jury’s verdict is supported by the overwhelming evidence of guilt presented at trial through financial documents and the testimony of the victims of Ms. Espejo’s crimes," Thyer said. "Lynn Espejo lied and cheated her employers out of hundreds of thousands of dollars, and today’s verdict makes clear that people who lie and steal will be held accountable."
In addition to the money stolen by wire transfer, the United States also presented evidence that Espejo obtained a PMSI debit card and used it for personal purchases from Wal-Mart, including grocery items such as snow crab, bacon, and popcorn balls, video gaming devices, school supplies, and a trampoline. Espejo also used stolen money to make payments toward a vehicle, a pool, and new home construction expenses, which comprised the money laundering counts. From 2007 through 2010, Espejo had over $100,000 in legal expenses, over $479,000 in credit card payments, and went significantly over budget on the construction of her house in Sherwood, including the addition of a pool house.
The jury further found Espejo guilty of willfully making and subscribing false income tax returns for tax years 2007 through 2010 due to her failure to report the stolen money as income. Testimony established an additional tax due and owing of $207,941 for tax years 2007 through 2010.
"As this year’s tax filing deadline approaches, today’s conviction of Ms. Espejo is a powerful reminder that income from all sources, including fraud, is taxable," Montaño said. "Through our partnership with the US Attorney’s Office and other law enforcement agencies, IRS Criminal Investigation will continue their aggressive pursuit of those who victimize the public and defraud America's tax system for their own personal gain."
The statutory penalty for wire fraud, a violation of 18 U.S.C. § 1343, is not more than 20 years’ imprisonment, not more than a $250,000 fine, or both, and not more than three years supervised release. The statutory penalty for money laundering, a violation of 18 U.S.C. § 1957, is not more than 10 years’ imprisonment, not more than a $250,000 fine or twice the amount of the criminally derived property involved in the transaction, and not more than three years supervised release. The statutory penalty for willfully making and subscribing false income tax returns, a violation of 26 U.S.C. § 7206(1), is not more than three years’ imprisonment, not more than a $100,000 fine, or both, together with the costs of prosecution, and not more than one year supervised release.
The investigation was conducted by the IRS-Criminal Investigations.
Source: U.S. Department of Justice, Office of the United States Attorneys
