KNOXVILLE, Tenn. — A Knoxville woman was sentenced to 44 months in prison on Thursday after authorities said she embezzled around $725,770 from her employer and forged more than 250 checks over a 7-year period.
They said Michelle Lynn Clabough, 45, pleaded guilty to two counts of forging private entity securities, one count of filing a false statement and one count of filing a false bankruptcy record. She was ordered to pay $725,770 in restitution to her former employer, as well as $134,421 to the IRS.
According to the plea agreement, Clabough was employed as a secretary at Bender and Associates Structural Engineers in Knoxville and embezzled the money over seven years. Part of her responsibilities at the company was to prepare payroll and expense checks, which she submitted to the company's owners for approval.
The owner of B&A also had a bank account for Forest Court Properties, and officials said Clabough wrote expense checks from the FCP account too.
According to the plea agreement, she wrote checks withdrawing funds from both accounts without approval from the company's owners. According to the plea agreement, she wrote checks of more than $6,000 each.
Records show she took around $158,000 from the B&A account and around $567,000 from the FCP account in total.
Prosecutors also said she submitted fraudulent tax returns that did not include the embezzled money, resulting in $134,421 in unpaid taxes. They said in 2019, she submitted a tax return claiming she made around $34,000. However, prosecutors said it did not include around $130,000 in embezzled money.
They also said Clabough submitted a false record in a Chapter 13 bankruptcy proceeding, in which she did not disclose the money from the embezzled funds.
The Internal Revenue Service's criminal investigation department looked into the case.
