Annie Corbett, the owner of a company that provided group homes, primarily in San Jose, for foster children, was sentenced Wednesday to spend 12 months and a day in prison for wire fraud and failure to pay employment taxes.
Corbett pleaded guilty to the charges on Sept.15. She was the owner, CEO and president of Corbett Group Homes, Inc. (CGH), a company that provided foster care for children and adolescents in group homes located primarily in San Jose.
According to her plea agreement, Corbett admitted that from 2011 through mid-2018, she was the sole signatory on CGH’s bank accounts and was solely responsible for hiring employees, firing employees, and processing employee payroll, prosecutors said.
During this time, CGH employed about 60 employees a year. In her plea agreement, Corbett acknowledged she knowingly failed to pay employment taxes. After contracting with payroll processing companies to determine the tax withholdings for CGH employees and issuing paychecks and W-2s to the employees, she never paid the employment taxes nor filed W-2s with the IRS. Corbett also admitted that she deceived her bookkeeper and CPA into believing these employment taxes had been paid.
Corbett admitted in her plea agreement that from 2014 through 2017 she failed to pay employment taxes to the IRS in an amount totaling more than $752,000.
The announcement was made jointly by U.S. Attorney Ismail J. Ramsey, FBI Special Agent in Charge Robert K. Tripp, Internal Revenue Service-Criminal Investigation (IRS-CI) Special Agent in Charge Darren Lian, and U.S. Department Health and Human Services—Office of Inspector General (HHS-OIG) Special Agent in Charge Steven J. Ryan. The sentence was handed down by the U.S. District Judge. Beth L. Freeman.
In addition, Corbett also admitted in her plea agreement that she fraudulently diverted for her own personal use funds CGH received from local county governments and private charities to support CGH’s care of foster children. Corbett admitted she controlled multiple CGH bank accounts—including an account that she concealed from CGH’s accountant and auditor—from which she diverted CGH funds to her and her husband’s personal bank accounts.
Prosecutors said Corbett used the diverted funds for her and her family’s personal enrichment, including making her own credit card payments, her personal retail business payments, and her payments on a vacation timeshare.
As noted in the government’s sentencing memorandum, Corbett’s conduct impacted not only over 44 identified victim-donors (county governments, charities, and individuals who provided CGH over $13.2 million in foster care funds over the course of seven years), but also her own employees and the many foster children who were deprived of the benefit of the funds that should have been used for their care. Freeman described Corbett’s crimes as “very serious” and found that the loss resulting from her embezzlement scheme exceeded $2.5 million.
In addition to the prison term, the judge ordered Corbett to serve 36 months of supervised release to begin after the expiration of her prison term. Freeman also scheduled a hearing for June 27 to determine the amount of restitution Corbett will be ordered to pay. Freeman ordered Corbett to surrender on or before Sept. 5, to begin serving her prison term.
