Hiltz & Associates Blog
Fraud, Embezzlement and Risk in the Dental Office
LITTLE ROCK—Cody Hiland, United States Attorney for the Eastern District of Arkansas, and Tracey D. Montaño, Internal Revenue Service (IRS) Special Agent in Charge, announced today that United States District Judge Kristine G. Baker sentenced Lynn Alisa Espejo, 53, of Sherwood, to 45 months in federal prison for her role in a scheme in which she stole more than $600,000 from her employers.
On February 8, 2017, after a seven-day trial, a federal jury found Espejo guilty on 4 counts of filing false tax returns, 15 counts of wire fraud, and 6 counts of money laundering.
On Friday, Judge Baker, in addition to the prison time, imposed three years of supervised release and $2,500 in special assessment penalties. Restitution in this type of case is mandatory, and Judge Baker announced that she will determine the amount of restitution Espejo must pay the IRS and issue an order at a later time.
“Today’s sentence reflects the seriousness of Ms. Espejo’s crimes,” Hiland said. “She stole hundreds of thousands of dollars from people who trusted her, and then repeatedly lied about it. These financial and tax-related crimes hurt not just the actual victims Ms. Espejo stole from, but also all citizens who are honest and pay their taxes as they should.”
From 2007-2010, 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. Espejo was responsible for managing PMSI’s general financial ledger. During her employment, Espejo stole approximately $611,099 by wire transfer from PMSI and BMSI to her personal bank accounts. Espejo misrepresented these transactions in the accounting software Quickbooks and concealed the wire transfers from the doctors and their accountant. Espejo used stolen money for personal expenses such as making payments toward a vehicle, a pool, and construction expenses on a new house.
In addition to the money stolen by wire transfer, 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.
During this same time period, Espejo filed false tax returns with the IRS in which she failed to report the stolen money as income on her tax returns. These returns resulted in a tax loss of approximately $207,941 for tax years 2007 through 2010.
“Ms. Espejo’s employers entrusted her to ethically and responsibly manage their business’ financial affairs, but instead she decided to divert funds for her personal benefit,” Montaño said. “IRS Criminal Investigation Special Agents are experts in unraveling complex tax fraud and money laundering schemes utilizing our forensic accounting skills. These specialized skills coupled with our partnership with the U.S. Attorney’s Office are key to the identification, investigation, and prosecution of these types of white collar crimes.”
This case was investigated by the IRS Criminal Investigation. Assistant United States Attorneys Stephanie Mazzanti and Jamie Dempsey prosecuted the case for the United States.