DALLAS—The wife of a former executive at the Collin Street Bakery (Bakery) in Corsicana, Texas, appeared Friday before U.S. Magistrate Judge Paul D. Stickney and entered a guilty plea to a conspiracy offense stemming from her husband’s admitted $16 million embezzlement from the Bakery, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.

Kay Jenkins, 64, of Corsicana, pleaded guilty to one count of conspiracy to commit money laundering. The maximum statutory penalty for that offense is 10 years in federal prison and a fine not to exceed $250,000 or the pecuniary gain to the defendant or loss to the defendant. However, according to plea documents filed in her case, if the Court accepts the plea agreement, the parties agree that the appropriate maximum term of imprisonment is 36 months’ imprisonment. Kay Jenkins remains on bond pending sentencing set for September 16, 2015, before U.S. District Judge Ed Kinkeade.

Jenkins’ husband, Sandy Jenkins, 66, who remains in federal custody, served as the Corporate Controller for the Bakery from February 1998 to June 21, 2013. He was terminated on June 21, 2013, after the Bakery discovered the fraud. He pleaded guilty in May 2014 to one count of mail fraud, one count of conspiracy to commit money laundering, and one count of making a false statement to a financial institution. He faces the following maximum statutory penalties: 20 years in federal prison and a $250,000 fine on the mail fraud conviction; 10 years in federal prison and a $1 million fine on the conspiracy conviction; and 30 years in federal prison and $1.5 million fine on the false statements conviction. He also agreed to a forfeiture money judgment against him of at least $16,649,786, and he agreed to pay full restitution to the Bakery for the entire scope of his criminal conduct. He is scheduled to be sentenced on June 24, 2015, by Judge Kinkeade.

According to plea documents filed in Kay Jenkins’s case, she agreed that the government could readily prove at trial that beginning at least as early as December 2004, and continuing until his termination from the Bakery in June 2013, Sandy Jenkins engaged in a massive scheme to defraud the Bakery in order to financially benefit he and his wife. Over the course of time, Sandy Jenkins embezzled more than $16 million from the Bakery that was used to fund an extravagant lifestyle for the couple. Kay Jenkins did not participate in the embezzlement of funds from the Bakery.

Kay Jenkins admitted that during this period she conspired with her husband to engage in monetary transactions with property derived from a criminal activity. Kay Jenkins agreed that the government could readily prove at trial that the funds involved in these monetary transactions were derived from her husband’s embezzlement of funds from the Bakery.

Starting in approximately 1998, Sandy Jenkins began working at the Bakery with an annual salary of approximately $25,000. In approximately 2000, Sandy Jenkins was promoted to Controller, a position he held until his termination. At no point during his employment at the Bakery did his salary exceed approximately $50,000 per year. Beginning at the approximate time Sandy Jenkins began embezzling money from the Bakery, Kay Jenkins did not work outside of the home. She knew that their income was insufficient to pay for their extravagant lifestyle.

Sandy and Kay Jenkins primarily spent the embezzled funds by making charges on an American Express Centurion credit card that charges a $2,500 yearly service fee but has no credit limit. Both Sandy and Kay Jenkins had these cards, and between 2005 and 2013, they incurred charges totaling approximately $11,120,449 with American Express. Kay Jenkins admits that Sandy Jenkins paid the American Express bill at the end of each billing period using embezzled funds from the Bakery.

Between 2005 and 2013, Sandy and Kay Jenkins incurred charges totaling approximately $1,941,596 on Citibank credit cards and charges totaling approximately $1,196,773 on a Neiman Marcus credit card. Kay Jenkins further admits that she and Sandy Jenkins purchased significant amounts of watches, jewelry and other precious items.

While Sandy Jenkins never specifically discussed with Kay Jenkins that he was embezzling funds from the Bakery, Kay Jenkins admits she deliberately closed her eyes to what would otherwise have been obvious to her. Kay Jenkins knew that Sandy Jenkins provided different explanations to different people when attempting to explain the source of funds, and she knew that some of those explanations were false.

The FBI conducted the investigation. Assistant U.S. Attorney J. Nicholas Bunch is in charge of the prosecution and Assistant U.S. Attorney Melissa Childs is handling the forfeiture.