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Ex-Connecticut Resident Sentenced For Tax Evasion Scheme Using 'Ghost Employees'

A former business owner in Fairfield County will spend time behind bars after admitting to bilking the IRS out of hundreds of thousands of dollars during a scheme involving “ghost employees.”
A former business owner in Fairfield County will spend time behind bars after admitting to bilking the IRS out of hundreds of thousands of dollars during a scheme involving “ghost employees.” Photo Credit: File

A former business owner in Fairfield County will spend time behind bars after admitting to bilking the IRS out of hundreds of thousands of dollars during a scheme involving “ghost employees.”

Former Madison resident Theresa Foreman, 57, who now lives in St. Cloud, Florida, has been sentenced to a term of 12 months and one day in prison, followed by three years of supervised release, after pleading guilty to one count of tax evasion after failing to report $712,445.71 to the IRS over several years during her scheme, which began in 2012.

Foreman, who operated Equinox Home Care in Stratford, began taking out money in 2012 from the company by depositing or cashing checks written to individuals who did not actually work for Equinox, U.S. Attorney John Durham said.

Between May 2012 and December 2013, approximately $413,000 in payroll checks to the “ghost employees” were deposited into accounts controlled by Foreman’s brother. During the same period, approximately $465,000 was withdrawn from the accounts in cash, cashback from deposits, or checks payable to Foreman.

Durham said that Foreman also had employees cash company checks and return the money to her, which she cashed mileage reimbursement checks made out to other individuals and used the funds for her own benefit.

The investigation also revealed that between August 2014 and November 2015, Foreman made or caused to be made 101 cash deposits totaling $580,580 to a bank account in a family member’s name. She then proceeded to fail to report the amounts she received through the scheme to the IRS. She also owed taxes for 2010 and 2011 and provided false information about her income and assets to the IRS.

In total, Foreman admitted that she owed the IRS $712,445.71, which she was ordered to pay back.

Foreman remains released on a $10,000 bond. She is scheduled to report to prison on Friday, Feb. 28.

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