Middletown Nurse Sentenced to Federal Prison for Tax Evasion

Connecticut Valley Hospital employee Stephanie Elliott of West Hartford was sentenced Friday, August 14, to 16 months of imprisonment, followed by three years of supervised release, for tax evasion.

“We must not forget that the ultimate victims in tax fraud cases are the citizens of the United States – those honest taxpayers who diligently file tax returns every year,” said Special Agent in Charge William Offord, IRS Criminal Investigation. “Today’s sentencing sends a clear message to would-be criminals—you will be caught and you will be punished.”

The sentencing stems from an Internal Revenue Service investigation into State of Connecticut employees and others who had little or no federal withholding taken out of their paychecks and who failed to file income tax returns, according to a press release from Deirdre M. Daly, United States Attorney for the District of Connecticut, and William P. Offord, Special Agent in Charge of IRS Criminal Investigation in New England.

The investigation revealed that certain state employees submitted fraudulent W-4 forms claiming numerous exemptions and had no money withheld from their wages.

According to court documents and statements made in court, Elliott has been employed by the Connecticut Department of Mental Health and Addiction Services at the Connecticut Valley Hospital in Middletown since 1999, first as a mental health assistant, and later as a nurse.

She submitted a false Form W-4 to the state indicating that she had 99 exemptions and was exempt from tax withholding. As a result, no money was withheld from her wages.

During the 2007 through 2012 tax years, Elliott paid no federal income taxes on more than $515,000 in income she received, resulting in a federal tax loss of $73,599.

“Our government can only function when citizens comply with our tax laws,” said Daly. “Public employees, who rely on taxpayers to fund their salaries, have a special responsibility to pay their fair share of taxes. Those who deliberately choose to disregard their tax obligations may be prosecuted, ordered to pay back taxes with interest and penalties and, as this case shows, face time in prison.”

Elliott was ordered to pay $105,697.22 in back taxes and interest.

On February 12, 2015, Elliott pleaded guilty to one count of tax evasion. Three other people, including two who worked at the Connecticut Valley Hospital, have been charged as a result of this ongoing investigation. They pleaded guilty and await sentencing.

This matter is being investigated by the Internal Revenue Service – Criminal Investigation Division and prosecuted by Assistant U.S. Attorney Susan Wines.

(image via shutterstock)