Las Vegas Sun

July 28, 2014

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Crime:

Woman who defrauded Culinary Union, other businesses sentenced to prison time and millions in restitution payments

A woman was sentenced to more than five years in prison today for embezzling more than $3.3 million from small businesses through her payroll-services firm.

Deborah DiFrancesco, 56, pled guilty in May to tax evasion and three counts of wire fraud committed during her time working at Lakes Payroll, Inc.

According to her guilty plea, from 2009 to 2011, DiFrancesco provided reports to her clients indicating that their funds they had authorized for transfer to cover payroll taxes had been forwarded to the appropriate tax authorities, including the Internal Revenue Service.

While she showed businesses the accurate documents, she also prepared a set of false documents with a lower amount of payroll taxes that she sent to the IRS and other tax authorities. She then pocketed the difference, accumulating $3.3 million from small business clients, which she then used for gambling and personal expenditures.

She hid the fraud behind an expanding client and tax base, late filings and paying past liabilities with current client deposits. But in January 2011, her scheme came undone when one of her clients, Culinary Local 226, hired a CPA to audit the union’s tax filings. The CPA uncovered a deficiency for the union of about $673,000 with tax authorities.

The IRS investigated DiFrancesco's actions and found that they had a ripple effect, reaching victims as far as Utah, IRS officials said.

In addition to 63 months in jail, DiFrancesco must pay the victims more than $3.8 million and the Internal Revenue Service more than $1.1 million in restitution — a total amount that would likely take her several lifetimes to pay off in full, IRS officials said.

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