Woman sentenced for stealing from clients of her payroll company

CHESTERFIELD, Mo. -- A 42-year-old Chesterfield woman has been sentenced to three years in federal prison for bilking clients at her payroll company instead of paying her clients' federal taxes.

Angela Smiley, president of American Payroll Service, was sentenced Friday to three years in federal prison. She must also serve three years of supervised release and pay restitution. Investigators and Smiley's lawyers are still working on how much she owes.

Many of her clients were left with bills to pay. But Michael Devine, spokesman for the Criminal Division of the Internal Revenue Service, said the agency could work with the victims to set up payment plans or reduce penalties.

Smiley pleaded guilty Nov. 1 of mail fraud and failing to pay federal income taxes, and admitted taking more than $600,000.

Stephen Cox, owner of Cox Industrial, told U.S. District Judge Rodney W. Sippel that after he found out that he owed $305,000 in taxes, penalties and fines, he sold his house to keep the business open. Other clients told Sippel that they had been forced to close or sell their companies.

Prosecutors said Smiley used the money to pay her own salary, for company and personal expenses and to pay the salary of her husband, who was not an APS employee.

When clients complained that the IRS was pressing for payments, she told them it was a mistake, or used other customers' money to make up the difference, according to court documents.

Defense lawyer Scott Rosenblum said Smiley deserved sentencing consideration because of health problems and strong ties to her two teenage children and ailing adoptive parents. He also said she had contributed to the community by volunteering and helping to raise thousands for charity.

Assistant federal prosecutor Hal Goldsmith said Smiley was entrenched in high society, while at the same time "stealing substantial amounts of money in order to pay for 'the finer things in life,' including luxury cars, a yacht, country club membership and real estate."