NR woman sentenced to prison in federal court
MADISON – A New Richmond woman who embezzled $300,600 from the company she co-founded and failed to pay $1.269 million in employee withholding taxes was sentenced Tuesday in federal court to 2.5 years in prison and ordered to make restitution.
Stephanie Johnson, 40, betrayed the trust placed in her by lifelong friend and co-owner of Paradigm Services, Inc., Jamie Carufel, plus several employees of the company that provided care for developmentally disabled adults in group homes and private residences.
Between 2008-17, Johnson, company treasurer and bookkeeper, failed to pay taxes to the IRS despite PSI having the funds to do so, said District Judge William Conley. Instead, Johnson spent the money on herself to take vacations, attend concerts and “who knows what,” said Carufel.
While employee paychecks bounced and Carufel could no longer afford insurance to pay $16,000 in hospital expenses, Johnson was “sucking every last penny out of the business,” Carufel told Conley.
“This was someone closer than a sister,” Carufel said of Johnson. “We were in the delivery room for each of our children.”
Conley said Johnson was running a confidence scheme on the company and her community of friends.
Johnson’s dishonesty and betrayal of a long-term friendship may have reached a low point when she and Carufel asked Carufel’s parents for $100,000 to keep the business afloat.
“She took their retirement funds … I had to cash in my retirement,” for household expenses, Carufel said.
Despite pleading guilty earlier this year to failing to pay withholding tax and embezzlement, Johnson did not demonstrate acceptance or responsibility for her offense as she continued not to pay withholding taxes on behalf of company employees, Conley said.
Johnson showed no remorse, Carufel said.
Johnson’s court-appointed attorney, Peter Moyers, said his client has repaid Carufel $49,000, plus $8,086 to the IRS, $68,347 to Wisconsin Department of Revenue, and $31,000 in unemployment insurance contributions.
While the court received dozens of confidential letters critical of Johnson, many letters were written on her behalf, said Moyers.
Moyers disagreed that Johnson has not accepted responsibility for her crimes but still “has a long way to go in terms of understanding how she hurt people,” he said.
Johnson said she “had no defense,” for what she did and doesn’t fully understand why.
“I feel I’ve ruined Jamie’s life and everyone I’ve touched, and I deserve the consequence,” she told Conley. “They didn’t deserve what I did.”
She understands why Carufel doesn’t like her which makes it difficult to express remorse to someone who is so angry, Johnson said.
Conley asked Johnson why she kept stealing when it was “derailing” the company.
“I knew I was being greedy and selfish. It was only a little bit at a time and I didn’t realize until I sat down with Jamie and put it on a spreadsheet that I saw how much it was,” she replied.
Asked by Conley how she could ask Carufel’s parents for money when she knew the company was “under water,” Johnson said she thought she could borrow her way out of debt.
“That’s what happens to people when they go down the road of fraud,” said Conley.
Conley acknowledged Johnson’s “chaotic” upbringing by substance abusing parents and Johnson marrying “while still a child,” to abusive men.
Johnson embezzled company funds by taking money from its bank accounts, using company debit cards to pay for meals, clothing and purchases from Amazon.com and other retailers for merchandise for her own use, according to the 29-count indictment.
Following her prison sentence, Johnson is to serve three years on supervised release during which her financial activities will be monitored to prevent her from engaging in the same criminal conduct. Conley ordered Johnson to report to a prison to be determined later by Sept. 12.