San Rafael Woman Pleads Guilty to Wire Fraud and Tax Evasion
Embezzled at Least $400,000 from Employer

SAN FRANCISCO—Kristy S. Watts (aka Kristy Siegrist) pleaded guilty in federal court in San Francisco Thursday to wire fraud and tax evasion, United States Attorney Joseph P. Russoniello announced.

In pleading guilty, Watts admitted that from approximately 1993 through December 2008, she was employed by an individual identified in court documents as “Employer A.” During the time that she worked for Employer A, Watts’s responsibilities included bookkeeping, payroll, accounting, and petty cash duties. Watts also coordinated household and travel expenses for Employer A and was involved in assisting in managing some of Employer A’s bank accounts. From 2003 through November 2008, Watts embezzled and stole at least $400,000 from Employer A. She accomplished this through several different means. Watts deposited numerous checks that had been payable to “cash” to her own personal bank account and used the cash for her own benefit. She also used Employer A’s credit card reward points to purchase gift cards and airline tickets for herself and her family. She also abused her control over payroll to pay herself more than the actual salary she was due. To conceal her fraud, Watts allegedly made false entries in TPA’s accounting system, including falsely reporting that certain checks were payable to vendors for household expenses, when in fact those checks had been made payable to “cash” and deposited into her personal bank account. Watts also attempted to evade a large part of the federal income tax due for the years 2004 through 2007. The income that she understated consisted of monies she converted to her own use by depositing checks signed by her employer and made payable to “cash.”

Watts, 47, of San Rafael, Calif., was charged by Information on Aug. 19. She was charged with one count of wire fraud in violation of 18 U.S.C. § 1343 and four counts of tax evasion, in violation of 26 U.S.C. § 7201. Under the plea agreement, Watts pled guilty to all counts.

Watts is scheduled to be sentenced on Feb. 4 by United States District Court Judge Vaughn R. Walker in San Francisco. The maximum statutory penalty for wire fraud, in violation of 18 U.S.C. § 1343, is 20 years and a $250,000 fine. The maximum statutory penalty for each count of tax evasion, in violation of 26 U.S.C. § 7201, is five years in prison and a $250,000 fine. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Robin Harris and Doug Sprague are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Jennifer Hiwa and Rayneisha Booth. The prosecution is the result of an investigation by the IRS – Criminal Investigation and the Federal Bureau of Investigation.

Further Information:

Case #: 09-0849 VRW

A copy of this press release may be found on the U.S. Attorney’s Office’s Web site at www.usdoj.gov/usao/can.

Electronic court filings and further procedural and docket information are available at https://ecf.cand.uscourts.gov/cgi-bin/login.pl.

Judges’ calendars with schedules for upcoming court hearings can be viewed on the court’s Web site at www.cand.uscourts.gov.

All press inquiries to the U.S. Attorney’s Office should be directed to Jack Gillund at (415) 436-6599 or by email at Jack.Gillund@usdoj.gov.