Knoxville woman sentenced to 44 months in prison for embezzling about $725,000, filing false tax returns and going bankrupt | USAO-EDTN

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Knoxville, Tenn. – On February 3, 2022, Michelle Clabough, 45, of Knoxville, was sentenced to 44 months imprisonment by the Honorable R. Leon Jordan, in the United States District Court for the Eastern District of Tennessee at Knoxville.

As part of the plea agreement filed with the court, Clabough pleaded guilty to two counts of falsifying securities of private entities, in violation of 18 USC § 513(a), one count of filing a false statement, in violation of 26 USC § 7206(1), and one count of filing a false bankruptcy filing, in violation of 18 USC § 1519. She was sentenced to 44 months imprisonment, followed by three years of probation. Additionally, she was ordered to pay full restitution in the amount of $725,770 to her former employer and $134,421 to the Internal Revenue Service.

According to court documents, during a seven-year period while Clabough was employed as an office manager, she forged more than 250 checks and embezzled $725,770 from her employer. During this same period, Clabough submitted fraudulent tax returns that did not include his stolen earnings, resulting in a tax loss of $134,421. Additionally, Clabough presented a false record in a Chapter 13 bankruptcy proceeding in which she failed to disclose the income she earned through her embezzlement.

The criminal indictment was the result of an investigation by the Internal Revenue Service – Criminal Investigation.

Assistant United States Attorney Jennifer Kolman represented the United States.

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