Former Public Building Commission Payroll Manager Sentenced for Tax and Wire Fraud Scheme

On October 26, 2018, U.S. District Court Judge Sara Ellis sentenced former Public Building Commission (PBC) Manager of Payroll and Benefits Tara Smith to 36 months of probation, 200 hours of community service, and restitution in the amount of $51,018 to PBC and $40,371 to the Internal Revenue Service. United States v. Tara Smith, 18 CR 164 (ND IL). Ms. Smith, who processed payroll for PBC’s employees, executed a scheme to defraud PBC in 2014 and 2015 in which she made periodic electronic submissions of false information to ADP, PBC’s payroll processor, representing that she was entitled to additional payroll payments. In total, Smith fraudulently arranged to receive $51,018 in unauthorized payroll payments from PBC, which were then deposited into bank accounts she controlled.

Smith also filed materially false and fraudulent U.S. Individual Income Tax Return Form 1040s in 2014, 2015, and 2016, in which she willfully failed to report all the income she received; specifically, the unauthorized payroll payments from PBC she had received from her scheme. Smith sought to conceal certain unauthorized payments by, among other things, electronically submitting an amended W-2 to ADP via e-mail in January 2015 which did not reflect the unauthorized payments she had fraudulently received in 2014.

The investigation was conducted by the City of Chicago Office of Inspector General, working conjunction with the Internal Revenue Service and the U.S. Attorney for the Northern District of Illinois.

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