A former CFO of a Connecticut healthcare staffing agency pleaded guilty to aiding the co-founder of the company with tax evasion, the U.S. Justice Department said Jan 13.
Pamela Smith was the CFO of Equinox Home Care from about 2009 to 2018. The healthcare staffing firm was established as a partnership by Theresa Foreman and another individual.
According to prosecutors, Ms. Smith and the staffing firm's payroll manager helped Ms. Foreman receive money from Equinox Home Care in a manner that hid she was the recipient of the payments.
Starting in 2012, Equinox Home Care's payroll included checks and payments to "ghost employees," who didn't work at the firm, according to prosecutors. Those funds were instead going to Ms. Foreman.
As CFO of the company, Ms. Smith knew about the paychecks going to ghost employees.
According to the lawsuit, Ms. Smith was also involved in assisting Ms. Foreman in a scheme that involved bonus checks from the firm to about 30 actual employees. Those employees cashed the checks and gave the money to Ms. Foreman.
Ms. Smith also worked with the individual who prepared the tax return for the firm and for Ms. Foreman. Prosecutors said Ms. Smith failed to inform the return preparer about the funds Ms. Foreman received through the various schemes. About $600,000 of the funds were not reported on the 2014 tax return, according to prosecutors.
Ms. Smith faces up to three years in prison for aiding the preparation of a false tax return.
Ms. Foreman pleaded guilty to one count of tax evasion and was sentenced to 12 months and one day in prison last January.