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San Francisco Woman Pleads Guilty to Million-Dollar Embezzlement Scam and Tax Evasion



SAN FRANCISCO—Lily C. Aspillera pleaded guilty to mail fraud and tax evasion in federal court today, United States Attorney Joseph P. Russoniello announced.

In pleading guilty, Aspillera admitted that while employed as an executive assistant at major professional services firm Ernst & Young (E&Y), she engaged in a scheme through which she embezzled between $1 million and $2.5 million from the accounts of an E&Y client identified as “K.K.” Aspillera admitted to accomplishing her scheme through various unauthorized means, including: (1) writing more than $1 million worth of checks that were drawn on K.K.’s accounts payable to herself and to “Cash”; (2) writing checks drawn on K.K.’s accounts payable to two of K.K.’s employees for amounts greater than they were due, then having those employees cash the checks and give the excess cash back to Aspillera, falsely telling those employees that the cash they were bringing back was so she could pay other employees; (3) writing checks drawn on K.K.’s accounts to pay hundreds of thousands of dollars worth of Aspillera’s and her family members’ American Express bills; and (4) writing checks drawn on K.K.’s accounts for Aspillera’s benefit, including a $150,000 check to Aspillera’s sister-in-law that she used as a downpayment on a house that Aspillera then moved into and checks to pay car payments for two BMWs. Aspillera admitted to making several false statements to her supervisors and taking several steps to conceal her scheme during its course.

Aspillera also admitted that she willfully evaded a large part of the federal income tax due and owing by understating the joint taxable income on her federal income tax returns for calendar years 2005 through 2008. The income she failed to report consisted of the monies she converted to her own use by the means set forth above.

Aspillera, 66, of San Francisco, was indicted by a federal grand jury on Nov. 12, 2009. She was charged with nine counts of mail fraud, in violation of Title 18, United States Code, Section 1341, and four counts of tax evasion, in violation of Title 26, United States Code, Section 7201. Pursuant to the plea agreement, Aspillera pled guilty to all 13 counts.

Aspillera is out of custody on a $100,000 bond secured by property. The sentencing of Aspillera is scheduled for July 23, 2010, before Judge Illston in San Francisco. The maximum statutory penalty for each count of mail fraud, in violation of Title 18, United States Code, Section 1341, is 20 years in prison, a $250,000 fine, three years of supervised release, and restitution. The maximum statutory penalty for each count of tax evasion, in violation of Title 26, United States Code, Section 7201, is five years in prison, a $250,000 fine, three years of supervised release, and restitution. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Doug Sprague is the Assistant U.S. Attorney who is prosecuting the case with the assistance of legal assistant Rayneisha Booth. The prosecution is the result of a one-year investigation by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation.



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