Grasonville woman pleads guilty to $1.1 million fraud scheme - Insurance News | InsuranceNewsNet

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March 18, 2022 Newswires
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Grasonville woman pleads guilty to $1.1 million fraud scheme

Bay Times (Stevensville, MD)

BALTIMORE — Linda Pylant, of Grasonville, pleaded guilty March 3 to wire fraud, Social Security fraud, tax evasion and aggravated identity theft in connection with schemes to defraud her employer, fraudulently obtain disability insurance payments, and evade more than $225,000 in taxes, including by concealing income in connection with a bankruptcy petition. As a result of these crimes, Pylant admits that she illegally obtained more than $1.1 million.

The guilty plea was announced by United States Attorney for the District of Maryland Erek L. Barron; Special Agent in Charge Thomas J. Sobocinski of the Federal Bureau of Investigation, Baltimore Field Office; Special Agent in Charge Darrell J. Waldon of the Internal Revenue Service — Criminal Investigation, Washington, D.C. Field Office; and Special Agent in Charge Michael McGill of the Social Security Administration — Office of Inspector General, Philadelphia Field Division.

Wire Fraud Scheme

According to her guilty plea, from 2012 to about July 2020, Pylant worked for a Washington, D.C., trade association as an office administrator. Her responsibilities included bookkeeping and other accounting duties, making check deposits, handling accounts receivable, accounts payable and other administrative duties.

As detailed in her plea agreement, in October 2017, Pylant opened a bank account, purportedly for the trade association, for which she was the sole signatory and caused the bank statements to be mailed to her home. From October 2017 until July 2020, Pylant deposited more than $700,000 in checks, primarily from the trade association’s members and from insurance companies, which were intended for the benefit of the trade association. Pylant also transferred more than $70,000 of the trade association’s funds from a Pay-Pal account to the account she opened in the name of the trade association. In addition, Pylant admitted that she issued trade association checks made payable to herself and a contractor for the trade association, which she signed, forging the names of two trade association executives. Pylant then deposited the forged checks into other accounts she controlled.

Pylant spent more than $175,000 of the stolen funds at a local bingo hall, used more than $100,000 for retail, restaurant, and grocery expenditures and withdrew more than $200,000 in cash. As a result of the fraud scheme, Pylant obtained more than $900,000.

Social Security and Disability Fraud

On Aug. 18, 2015, Pylant applied for Social Security Disability Insurance payments, failing to disclose that she was working and earning income from the trade association. SSDI payments are only made as long as the beneficiaries are unable to work and/or their income is under a certain amount. From 2018 to July 2020, Pylant illegally received and spent more than $75,000 in SSDI payments to which she was not entitled.

In addition, from 2014 to about 2017, Pylant provided false information to a private insurance company in order to fraudulently collect disability insurance payments. Pylant consistently failed to disclose her income from the trade association, as well as her SSDI payments. As a result, Pylant fraudulently received more than $140,000 in disability insurance payments from the private insurance company.

Tax Evasion and Bankruptcy Fraud From 2014 until July 2020, Pylant caused

her salary payments from the trade association to be paid through a non-existent entity, LPSR, Inc., which Pylant created but did not register with the State of Maryland nor the Internal Revenue Service. Pylant also established LPSR as a vendor in the trade association’s computer system, with no federal tax identification number and no 1099 reporting status. During the six years of the tax evasion scheme Pylant caused the trade association to pay LPSR more than $100,000. During that time, Pylant also caused the trade association to not issue a 1099 IRS reporting form for LPSR. Because Pylant also made false statements to the Social Security Administration, including failing to disclose that she was employed by the trade association, she avoided paying taxes that would have been due on her SSDI payments.

As detailed in her plea agreement, Pylant submitted false information in the course of three Maryland bankruptcy proceedings filed on February 3, 2016, in December 2020, and in January 2021. Specifically, Pylant’s petitions failed to list her taxable income from the trade association that was paid through LPSR, falsely claimed that she had zero earned income and was not required to file any tax returns, failed to list any business names that she had used, including LPSR, and falsely stated that her employment status had not changed since February 2016.

Pylant admitted that her tax evasion offenses caused a tax loss to the United States of at least $233,547 and she will be required to pay restitution to the government in that amount.

As detailed in her plea agreement, Pylant will also be required to pay restitution in the full amount of the actual losses caused by her fraud schemes, which is at least $1.1 million. Pylant will also forfeit assets directly traceable to the fraud offenses, substitute assets, and/or a money judgement equal to the value of the property derived from the offense, which is at least $950,000.

Pylant faces a maximum sentence of 20 years in prison for wire fraud; a maximum of five years in prison for social security fraud and for tax evasion; and a mandatory sentence of two years in federal prison, consecutive to any other sentence imposed, for aggravated identity theft.

U.S. District Judge Richard D. Bennett has scheduled sentencing for 11 a.m. Sept. 8.

Barron commended the FBI, IRS-CI and SSA OIG for their work in the investigation. He thanked Assistant U.S. Attorney Harry M. Gruber and Special Assistant U.S. Attorney Michael F. Davio, who are prosecuting the case.

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