Angela C. Smiley Press Release (Sentencing)

January 19, 2007
For Immediate Release

OWNER OF AMERICAN PAYROLL SERVICE SENTENCED FOR DEFRAUDING CLIENTS OF MONIES INTENDED FOR THEIR QUARTERLY FICA & WITHHOLDING TAXES

St. Louis, Missouri: Angela C. Smiley, owner of American Payroll Service, has been sentenced to 36 months in federal prison on charges of embezzling more than $600,000 from client accounts that was intended for payment of their quarterly FICA and federal withholding taxes, United States Attorney Catherine L. Hanaway announced today. The court is still determining the amount of restitution. Judge Sippel has set a restitution hearing on April 6, 2007.

“Many businesses and organizations in the St. Louis area were victimized by Ms. Smiley's fraudulent conduct, including the St. Louis Archdiocese,” said Hanaway. “These victims trusted Ms. Smiley to properly remit their taxes, but instead she used their funds for her own personal and business purposes, and these victims are left holding the bag, having to pay substantial taxes after already having those funds taken from their businesses. Some of these people had to sell businesses and homes, which also affects their families and the families of employees who lost jobs.”

“Employment tax enforcement is an emphasis area for IRS Criminal Investigation. It is often the employees who feel the greatest impact from this crime because they may not qualify for social security, Medicare or unemployment benefits when employers do not report or pay employment taxes,” stated James D. Vickery, Special Agent in Charge of IRS Criminal Investigation. “Employers are required by law to withhold and pay employment taxes for their employees and failure to do so can result in criminal prosecution.”

Smiley drafted in excess of $600,000 of funds directly from APS business clients’ bank accounts in order to pay the clients’ federal tax liabilities, but failed to forward the funds to the IRS from January 2000 through September 2004. Instead of forwarding money to the IRS, she used those funds to pay employee payroll, her own salary, to pay her husband who was not an APS employee, to pay general operating expenses of APS and to pay her own personal expenses.

Additionally, as Power of Attorney for APS business clients, Smiley was contacted directly by the IRS and questioned about the failure of the APS business clients to have remitted moneys to pay their federal tax liabilities. She lied to them to conceal her scheme and then failed to advise the APS business clients of the IRS contacts and her false representations.

After a client discovered that their funds had not been paid to the IRS, Smiley used funds from other client accounts to pay their IRS obligation.

These client businesses included: Archdiocese of St. Louis, St. Ferdinand Parish; Central Avenue Restaurant Corporation, d/b/a Portabella; Coco Lobo; Country Club Bar & Grill; Cox Industrial Equipment; Education Unlimited; Frontenac Automotive; Jimmy’s Café on the Park; L & S Properties, d/b/a Cheshire Inn; Lutzski LLC, d/b/a Roly Poly; Office Solutions; Skyline Aeronautics; Super Smokers and Wildhorse Fitness.

ANGELA C. SMILEY, Chesterfield, pled guilty last November to one felony count of mail fraud and one felony count of failure to pay over federal income taxes. She appeared today for sentencing before United States District Judge Rodney W. Sippel.

Hanaway commended the work performed on the case by Internal Revenue Service-Criminal Investigation, the Postal Inspection Service, the Chesterfield Police Department and Assistant United States Attorney Hal Goldsmith, who handled the case for the U.S. Attorney’s Office.

UNITED STATES ATTORNEY'S OFFICE EASTERN DISTRICT OF MISSOURI CATHERINE L. HANAWAY United States Attorney	NEWS RELEASE
For further information: Call Public Affairs Officer Jan Diltz at (314) 539-7719
January 19, 2007 For Immediate Release OWNER OF AMERICAN PAYROLL SERVICE SENTENCED FOR DEFRAUDING CLIENTS OF MONIES INTENDED FOR THEIR QUARTERLY FICA & WITHHOLDING TAXES St. Louis, Missouri: Angela C. Smiley, owner of American Payroll Service, has been sentenced to 36 months in federal prison on charges of embezzling more than $600,000 from client accounts that was intended for payment of their quarterly FICA and federal withholding taxes, United States Attorney Catherine L. Hanaway announced today. The court is still determining the amount of restitution. Judge Sippel has set a restitution hearing on April 6, 2007. “Many businesses and organizations in the St. Louis area were victimized by Ms. Smiley's fraudulent conduct, including the St. Louis Archdiocese,” said Hanaway. “These victims trusted Ms. Smiley to properly remit their taxes, but instead she used their funds for her own personal and business purposes, and these victims are left holding the bag, having to pay substantial taxes after already having those funds taken from their businesses. Some of these people had to sell businesses and homes, which also affects their families and the families of employees who lost jobs.” “Employment tax enforcement is an emphasis area for IRS Criminal Investigation. It is often the employees who feel the greatest impact from this crime because they may not qualify for social security, Medicare or unemployment benefits when employers do not report or pay employment taxes,” stated James D. Vickery, Special Agent in Charge of IRS Criminal Investigation. “Employers are required by law to withhold and pay employment taxes for their employees and failure to do so can result in criminal prosecution.” Smiley drafted in excess of $600,000 of funds directly from APS business clients’ bank accounts in order to pay the clients’ federal tax liabilities, but failed to forward the funds to the IRS from January 2000 through September 2004. Instead of forwarding money to the IRS, she used those funds to pay employee payroll, her own salary, to pay her husband who was not an APS employee, to pay general operating expenses of APS and to pay her own personal expenses. Additionally, as Power of Attorney for APS business clients, Smiley was contacted directly by the IRS and questioned about the failure of the APS business clients to have remitted moneys to pay their federal tax liabilities. She lied to them to conceal her scheme and then failed to advise the APS business clients of the IRS contacts and her false representations. After a client discovered that their funds had not been paid to the IRS, Smiley used funds from other client accounts to pay their IRS obligation. These client businesses included: Archdiocese of St. Louis, St. Ferdinand Parish; Central Avenue Restaurant Corporation, d/b/a Portabella; Coco Lobo; Country Club Bar & Grill; Cox Industrial Equipment; Education Unlimited; Frontenac Automotive; Jimmy’s Café on the Park; L & S Properties, d/b/a Cheshire Inn; Lutzski LLC, d/b/a Roly Poly; Office Solutions; Skyline Aeronautics; Super Smokers and Wildhorse Fitness. ANGELA C. SMILEY, Chesterfield, pled guilty last November to one felony count of mail fraud and one felony count of failure to pay over federal income taxes. She appeared today for sentencing before United States District Judge Rodney W. Sippel. Hanaway commended the work performed on the case by Internal Revenue Service-Criminal Investigation, the Postal Inspection Service, the Chesterfield Police Department and Assistant United States Attorney Hal Goldsmith, who handled the case for the U.S. Attorney’s Office.