Date: February 14, 2023 Contact: newsroom@ci.irs.gov The United States Attorney's Office announced that Jody Lathrop, of Bristol, pleaded not guilty today in United States District Court in Burlington to an indictment charging her with mail and wire fraud, tax evasion and aiding the preparation of falsified tax returns. U.S. Magistrate Judge Kevin J. Doyle released Lathrop on conditions pending trial, which has not been scheduled. On January 24, 2023, a federal grand jury returned a nineteen-count indictment charging Lathrop with eleven counts of mail and wire fraud; four counts of personal tax evasion and four counts of aiding the preparation of false corporate tax returns. The indictment alleges that between 2014 and 2020, Lathrop served as office manager and bookkeeper for Claire Lathrop Band Mill, Inc., a logging and wood chipping business in Bristol, Vermont. The family business was owned jointly by Lathrop's husband and her husband's brother. As office manager, Lathrop handled the company's accounts payables and receivables and maintained its books and records, including its accounting software. According to the indictment, between 2014 and 2020, Lathrop embezzled more than $400,000 by using company credit cards to make personal purchases of goods and services; by using company funds to pay the personal credit card obligations of Lathrop and other family members; and by using company money to pay for other personal expenses. The indictment accuses Lathrop of trying to conceal the embezzlement by miscoding the personal expenditures in the firm's accounting system as legitimate business expenses. The indictment further alleges that Lathrop aided and abetted the preparation and submission to the Internal Revenue Service of falsified corporate tax returns for tax years 2016-2019. It charges that Lathrop submitted to the firm's corporate tax preparer false information that overstated the company's legitimate business expenses because they included non-deductible personal expenses incurred by Lathrop. These false submissions caused the tax preparer unwittingly to claim over $400,000 in business expenses more than the company was legally entitled to. Finally, the indictment charges that Lathrop caused her personal tax preparer to submit falsified tax returns for 2016-2019 that significantly understated her income because they did not include the amounts she embezzled during each of those tax years. According to the indictment, Lathrop thereby evaded approximately $141,000 in personal income taxes. The indictment does not accuse Lathrop's husband or either tax preparer of wrongdoing. The United States Attorney emphasizes that the charges in the indictment are merely accusations and that the defendant is presumed innocent unless and until she is proven guilty. If convicted on the mail and wire fraud charges, Lathrop faces up to 20 years of imprisonment and a fine of up to $250,000 or twice the gross gain or loss. The tax evasion and aiding and abetting charges are punishable by up to five and three years of imprisonment, respectively, and fines of up to $100,000. The actual sentence would be determined with reference to federal sentencing guidelines. This case was investigated by the Vermont office of the Internal Revenue Service Criminal Investigation (CI) and by Homeland Security Investigations. Lathrop is represented by Mark Kaplan, Esq. The prosecutors are Assistant U.S. Attorneys Kimberly Ang and Gregory Waples.
