Former Guilford Resident Pleads Guilty To Federal Tax Charge

GUILFORD, CT —Pamela Smith, 72, a former Guilford resident and previous head of a Connecticut staffing agency, pleaded guilty on a federal tax charge, the U.S. Attorney announced Wednesday.

She faces three years in prison.

According to court documents and statements made in court, a press release from prosecutors reads, from 2009 and 2018, Smith was the Chief Financial Officer of Equinox Home Care, a home healthcare staffing agency based in Stratford. The statement reads that her company established as a partnership between Theresa Foreman and another person. Then, in September 2012, the partnership ended, and, by court order, Foreman was obligated to make payments to her partner for the purchase of the partner’s interest in the company, federal prosecutors said.

Prosecutors said that, "At Foreman’s direction, Smith and EHC’s payroll manager helped Foreman receive money from EHC in a manner that hid the fact that Foreman was the true recipient of the funds through."

The U.S. Attorney said that beginning in 2012, the company's payroll included "payments to 'ghost employees' who did not work for EHC, and those funds were actually for Foreman’s benefit."

"As the CFO of EHC, Smith became aware that the payroll checks were being issued to the 'ghost employees' and that EHC and its payroll manager were causing the false payroll checks to be issued," the statement reads.

"Smith also assisted Foreman by issuing or causing to be issued bonus checks from EHC to approximately 30 EHC employees," prosecutors said. "The employees cashed the checks and provided the cash to Foreman. Some of the employees later noticed that the amount of funds cashed had been included on their Forms W-2. Smith would issue a corrected W-2 only if an employee made a request. Several EHC employees did not request a corrected W-2 and, as a result, overpaid taxes to the IRS."

Federal prosecutors added that additionally, Foreman got money through cashed mileage checks that were issued to two people who did not drive on behalf of the company.

"Smith interacted with the tax return preparer who prepared the partnership tax return in addition to Foreman’s own individual income tax returns, and failed to inform the return preparer about funds that Foreman received through these various mechanisms. More than $600,000 of such funds were not reported on Foreman’s 2014 tax return alone," the U.S. Attorney's statement reads.

A sentencing date has not yet been scheduled.

According to the U. S. Attorney, as part of Smith’s plea agreement, "The government submits that approximately $266,000 of the tax loss was foreseeable to Smith as a result of her conduct."

Foreman pleaded guilty to one count of tax evasion and, on Jan. 6, 2020, was sentenced to a year and a day in federal prison and she was ordered to pay $641,941.46 in restitution, prosecutors said.