The former office manager of a family-owned Connecticut-based construction company pleaded guilty to wire fraud and tax evasion.
Erin Sullivan, of Cheshire, Conn., pleaded guilty on Oct. 30, 2023, in New Haven federal court after she was found to have embezzled nearly $1 million and evaded paying $233,738 in income taxes. The FBI and the Internal Revenue Service’s Criminal Investigation Division conducted the investigation with the help of the Orange Police Department.
According to the U.S. Attorney’s Office, District of Connecticut, Sullivan made false entries in the company’s payroll records and accounting system beginning in 2016. This caused the system to generate hundreds of fraudulent checks payable to her in what court documents state as “petty cash.”
Officials claim Sullivan concealed that she was the payee who received the checks. She did this by changing the reference in the accounting program after a check was issued to show that it had been issued to someone else, including the company’s owner. She also changed the dates on the checks and selected a false expense category to conceal her scheme further.
“Sullivan sometimes generated checks in the name of Company A’s owner, forged the signature of Company A’s owner on the checks and either cashed the checks or deposited them into her bank account,” write officials from the U.S. Attorney’s Office, District of Connecticut. “She also altered the payroll and accounting system in other ways, which resulted in her receiving additional pay to which she was not entitled.”
Court documents indicate Sullivan took around 369 fraudulently created checks and cashed them or deposited them into her account. She also altered the company’s payroll system approximately 65 times. She then used much of the money to pay her personal credit card bills.
After taking the money, court documents state Sullivan knowingly filed a false Form 1040 personal income tax return, in which she intentionally understated her taxable income by not reporting embezzled income that she knew she had received; specifically, she understated her taxable income for 2019 by $203,710.
Sullivan pleaded guilty to one count of wire fraud, which carries a maximum term of imprisonment of 20 years. She also pleaded guilty to one count of tax evasion, which carries a maximum term of imprisonment of five years. She was released on a $100,000 bond pending sentencing, which is not scheduled.