U.S. Attorney Bryan Schroder announced that an Alaska woman has been sentenced in federal court for devising multiple schemes to defraud an Anchorage medical practice of at least $640,000.
Jill Diane Applebury, aka: “Jill Wetzsteon,” 54, d/b/a Applebury Accounting Services, of Anchorage, was sentenced yesterday by Chief U.S. District Judge Timothy M. Burgess to serve four years in prison, followed by five years of supervised release. In November 2018, Jill Applebury pleaded guilty to four counts of bank fraud, one count of wire fraud, and one count of fraudulent transactions with an access device. The total amount of restitution to be paid to the victim will be determined within thirty days.
According to court documents, from the mid-1990’s until March 2013, Jill Applebury was an independent contractor who performed bookkeeping services for an Anchorage medical practice, which was owned and operated by an Anchorage physician. From at least 2001 until March 22, 2013, Jill Applebury defrauded the Anchorage medical practice in several ways.
One such scheme stems from 2001 through 2009, when Jill Applebury used the medical practice’s funds to pay her Federal Income Tax Withholding without authority. Specifically, Jill Applebury executed unauthorized and fraudulent transactions from the medical practice’s business bank account to the IRS, thereby having the medical practice pay her IRS individual income tax account. IRS Form 945 account transcripts for the medical practice showed that withheld taxes were paid to the IRS for the 2001-2009 calendar years, and applied to Jill Applebury’s individual income tax account. The total amount of unauthorized federal tax withholdings on independent contractor compensation paid by the medical practice for Jill Applebury’s benefit was $84,813.75.
Another scheme involved the medical practice’s profit-sharing plan. Employees of the medical practice were eligible to participate in its profit-sharing plan, which was overseen by a third-party administrator. Independent contractors did not qualify for the plan; however, Jill Applebury falsely represented to the third-party administrator that she had become a full-time employee of the medical practice in 2009, making her eligible to participate in the profit-sharing plan beginning in 2010. In all, Jill Applebury fraudulently caused the physician to unknowingly allocate $62,722.90 to her in unauthorized profit-sharing plan contributions for the years 2010 and 2011. As a result of the unauthorized overpayment caused by Jill Applebury to the profit-sharing plan, the Anchorage physician suffered an additional loss of $25,574.18, and was subject to an excise tax penalty in the amount of $1,931.80.
From July 2004 through December 2012, Jill Applebury devised a scheme to defraud the medical practice by fraudulently transferring funds from the medical practice’s business bank account to pay for charges on her and her family’s personal credit cards, including charges for travel and dining. The medical practice checking account was used to make payments totaling $18,229.97 on credit cards belonging to Jill Applebury, her husband and daughter.
Additionally, between 2004 and March 22, 2013, Jill Applebury used the medical practice’s business credit card to pay for items for their own personal and/or business benefit. The unauthorized charges included cell phone service for the Appleburys and members of their family, internet service for their residence, business licenses for businesses owned by Jill and Darin Applebury, automobile insurance for their personal vehicles, and other personal items. Jill Applebury also, without the consent of the Anchorage physician, put her nephew on the business cell phone plan, and used the business credit card to pay for fund raising gift cards obtained through GL Scripts to contribute to the same nephew’s youth soccer league. In all, Jill Applebury used the medical practice’s business credit card to pay for her and her husband’s personal and personal business expenses in the amount of $35,393.20.
The investigation also revealed that in October 2012, Jill Applebury fraudulently used the medical practice’s business credit card to purchase nearly $3,000 of medical products for her husband’s business, Rapid Recovery Medical Service, Inc. The fraudulent credit card purchases were made using the physician’s name and address without the knowledge and permission of the Anchorage physician.
Through her schemes, Jill Applebury was overpaid more than $550,000 for accounting and bookkeeping services, which also caused the medical practice to overpay the employer’s portion of payroll taxes in the amount of $23,469.69.
When imposing sentence upon Jill Applebury, Judge Burgess stated that the scope of the crimes committed against the Anchorage physician were breathtaking in that Jill Applebury treated the finances of the medical practice “like her own personal piggy bank.” Judge Burgess wanted to send a strong message to the financial community that such conduct would not be tolerated. Judge Burgess ordered Jill Applebury to no longer have any contact with the financial records of any business organization; he also found Jill Applebury to be a financial risk to third parties and ordered her to notify all future employers of her felony convictions.
The Federal Bureau of Investigation (FBI) and the Anchorage Police Department (APD) conducted the investigation leading to the successful prosecution of this case. This case was prosecuted by Assistant U.S. Attorney Retta-Rae Randall.