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FRANKLIN, PENNSYLVANIA WOMAN PLEADS GUILTY TO 3.1 MILLION DOLLAR FRAUD SCHEME

United States Attorney Mary Beth Buchanan announced today, January 19, 2007, that Kristal Ann Clark, a resident of Franklin, Pennsylvania, pleaded guilty in federal court to charges of mail fraud and income tax evasion.

Clark, age 42, pleaded guilty to six counts before United States District Judge Sean J. McLaughlin.

In connection with the guilty plea, Assistant United States Attorney Marshall J. Piccinini advised the court that Clark employed a scheme to defraud investment clients of approximately $3.1 million, and to evade the payment of income taxes for the tax years 2001, 2002 and 2003.

According to information provided to the court, Clark was an employee and administrative assistant with the investment firm, Parker Hunter, Inc., at its office located in Oil City, Pennsylvania. From 1998 through 2005 Clark devised a scheme whereby she obtained checks, drawn on the accounts of individual investment clients, which were mailed to her in the Oil City office, fraudulently endorsed and deposited those checks, and then credited the funds from those checks to her own Parker Hunter investment account, rather than to the rightful owner of those funds.

According to the information provided to the court, Clark attempted to hide her scheme and created false receipts utilizing photocopied client signatures purporting that the checks she received in the Oil City office had been received by the individual clients. Further, Clark engaged in a "lapping scheme", whereby she fraudulently credited amounts from one client's account to another client's account, to cover the amount of the funds that she had fraudulently deposited into her own account. Clark also created fictitious deposits and fictitious computer screen entries which made it appear that the funds were properly deposited, credited or posted to individual client accounts.

Through the scheme, Clark converted to her own use and personal benefit, and spent, approximately $3.1 million of the money and funds fraudulently obtained from the Parker Hunter, Inc. individual client investment accounts.

Judge McLaughlin scheduled sentencing for May 3, 2007 at 10:00 a.m. The law provides for a total sentence of seventy-five years in prison, a fine of $1,500,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the criminal history, if any, of the defendant.

Pending sentencing, the court released Clark on bond.

The Internal Revenue Service, Criminal Investigation and the Federal Bureau of Investigation conducted the investigation that led to the prosecution of Clark.

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