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Former Sacramento Auto Dealer Bookkeeper Sentenced to Prison for State Income Tax Evasion

Released: June 18, 2009

Sacramento – A Sacramento woman was sentenced yesterday to three years in state prison after pleading no contest to one felony count of state income tax evasion, the Franchise Tax Board (FTB) announced.

Mary Ann Machado, 42, was a former bookkeeper for a large Sacramento auto dealer group. According to court documents, Machado abused her position of trust by taking cash and using company checks to deposit funds into her bank account. Machado used this money for living expenses, paying credit cards, and purchasing expensive designer handbags. Machado failed to include the illegal income on her 2007 state income tax return. All income is taxable including income from illegal sources. Machado was ordered to pay FTB restitution of more than $66,000 representing the unpaid tax, penalties, interest, and the cost of the investigation.

Machado was previously sentenced to three years in prison for embezzling more than $400,000 from the auto dealer group. She pleaded no contest to one felony count of grand theft with an enhancement for taking more than $200,000 and was also ordered to pay restitution in the amount of $435,000. She was immediately taken into custody. Both sentences will be served concurrently.

Underreporting income or overstating deductions are part of the $6.5 billion tax gap California faces each year. The tax gap is defined as the difference between the tax that is owed and the tax that is paid.

Sacramento County Superior Court Judge Gary Ransom handed down the sentence in Department 8 of the Sacramento County Superior Court. Deputy District Attorney Lani Biafore prosecuted the case. This was a joint investigation between the Sacramento District Attorney’s Office and FTB.

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