SAN JOSE — A former South Bay group home owner pleaded guilty to federal fraud charges Tuesday, admitting in court that she misappropriated more than $1.2 million by pocketing her workers’ tax withholdings, and spent public and grant funds — meant for foster care support — on personal expenses including her timeshare.
The charges to which she pleaded, one count each of wire fraud and willful failure to pay over employment taxes, carry maximum prison sentences of 20 years and five years in prison, respectively, and up to a $250,000 fine for each count. Since the case resolution was reached through a plea agreement, it is unlikely Corbett’s sentence will approach those upper sentencing boundaries.
Corbett told this news organization in a 2019 interview that she closed the homes after her company was denied licensing by the state to manage what are known as Short-Term Residential Therapeutic Programs. She said that she and her employees, which numbered about 60 a year, had worked for two years ramping up to meet the programs’ higher care and service standards, and thereby keep the homes running.
The bookkeeper conflict coincides with the time period during which Corbett now says she committed fraud. The U.S. Attorney’s Office news release about Corbett’s guilty plea states that she “admitted that she deceived her bookkeeper and CPA” while she pocketed payroll taxes that were supposed to go to the IRS.
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