Bookkeeper who bilked Arkansas doctors of $600,000 gets 45 months in prison

A federal judge on Friday ordered Lynn Alisa Espejo of Sherwood to serve just under four years in prison on 25 counts related to her embezzlement of more than $600,000 from a group of doctors whose business expenses she administered from 2007 through 2010.

The 53-year-old former bookkeeper fought the charges every step of the way, which had the effect of keeping her under indictment for about six years. Her latest attorneys, David Cannon and Lee Short, cited her extensive time under threat of conviction as one of several reasons she should get a lenient sentence and suggested that she receive no prison time at all.

But U.S. District Judge Kristine Baker said, “This is not a probationary case.”

Baker also told Espejo that it was her own decision to fight the charges tooth and nail, stretching her case out over several years, and that she cannot count that time as punishment.

Espejo was originally indicted on 59 charges in 2011, but prosecutors later withdrew that indictment and refiled the allegations under a different theory in 2014. During the investigation, she filed claims against an assistant U.S. attorney and the main IRS agent investigating her. Prosecutors on Friday sought a sentencing enhancement for obstruction of justice related to those claims, which they called “false and fraudulent,” but Baker denied the request.

Also during her prosecution, Espejo accused one of the doctors who contributed to the business account she managed of sexually assaulting her, but he wasn’t charged, and Baker refused to let Espejo’s trial attorney, Patrick Benca, bring it up in front of jurors.

While siding with Espejo’s attorneys on several points — including denying several requests from prosecutors to increase her penalty range — Baker also rejected Espejo’s attempts to escape a 14-point sentencing enhancement for the amount of money stolen and amount of taxes she never paid on the stolen income.

Baker said she will issue a separate restitution order within 90 days after determining the amount of money Espejo must reimburse the physicians and the Internal Revenue Service. But in tentative findings, the judge agreed with the government that Espejo owes $207,941 in income taxes as result of not reporting the fraudulent income she received.

Espejo’s attorneys had argued that she owed $79,928.76 in unpaid income taxes, based on a lower amount — $285,459.86 — that they said she was actually convicted of defrauding Practice Management Services Inc. and Blandford Medical Services Inc. out of at trial.

But Baker said she included losses that occurred outside the indictment’s time frame, determining the total amount of money fraudulently transferred from the two physician accounts to Espejo’s personal accounts over the course of her employment to be $611,099.41.

The doctors established both corporations to administer their shared business expenses. Espejo contended at trial that at least one of the doctors she worked for had authorized her to “reimburse” herself from the business accounts for purchases she made at his request using her own money. However, that doctor, Bruce Sanderson, and three others testified that Espejo wasn’t authorized to take the money.

The jury found that Espejo misrepresented the transactions in the accounting software Quickbooks and concealed the wire transfers from the doctors and their accountant. They also found that she used stolen money for personal expenses such as making payments toward a vehicle, a swimming pool and construction on a new house.

In addition to the money stolen through a wire-transfer scheme, Espejo was convicted of obtaining a debit card for one of the shared-expenses accounts and using it for personal purchases such as snow crab, bacon, popcorn balls, video gaming devices, school supplies and a trampoline.

In explaining her decision to sentence Espejo to 45 months — in the middle of a 41- to 51-month penalty range recommended by the guidelines after Baker reduced the guideline range by two levels — the judge cited work that Espejo had performed in the community, as well as details of her “personal upbringing” that were recited in a nonpublic pre-sentence report.

The judge noted that she had read an “overwhelming stack of letters regarding Ms. Espejo’s good work” in the community, from which it appeared that Espejo’s efforts to help disadvantaged or marginalized people weren’t undertaken after she was indicted, in an effort to mitigate her sentence. Baker said the letters indicated that Espejo’s benevolent acts “predate her conduct in this case.”

However, Baker said, she has also “observed conduct that belies the character that others are describing” in the letters.

The judge cited incidents in which Espejo followed a witness against her out of the courtroom without permission of the court and in which she bad-mouthed an earlier set of attorneys in open court. Baker noted that Cannon and Short are Espejo’s third set of attorneys.

“Presented solely with the conduct I’ve observed in the courtroom, the letters leave me puzzled,” Baker said.

After a seven-day trial, the jury convicted Espejo on four counts of filing false tax returns, 15 counts of wire fraud and six counts of money laundering. In addition to the prison term, Baker ordered Espejo to serve three years of supervised release, during which she must enroll in a mental-health program at her own expense.

“Today’s sentence reflects the seriousness of Ms. Espejo’s crimes,” U.S. Attorney Cody Hiland said later in a news release. “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.”

The case was investigated by the IRS and prosecuted by Assistant U.S. Attorneys Stephanie Mazzanti and Jamie Dempsey.

Content retrieved from http://www.arkansasonline.com/news/2017/nov/04/bookkeeper-gets-45-month-term-in-embezz/