Aubrey Jackson Shelton II, Tax Evasion and Embezzlement, California 2023

Aubrey Jackson Shelton II, a Senior Vice President of Finance at a San Francisco technology company, has been charged with bank fraud, wire fraud, and tax evasion in connection with his scheme to embezzle more than $2.7 million from his employer.

According to the indictment, filed August 15, 2023, and unsealed today, Shelton used his exclusive control over the company’s payroll processing software to inflate his salary and bonuses over the authorized amounts and to direct the payroll processor to cause the company to pay him large amounts categorized as “Executive Loan,” “Misc Reimbursement,” “Mileage Reimbursement,” or other reimbursements that were not authorized or expended by Shelton.

Shelton submitted false information to the payroll processor about his salary in November 2013, causing the gross amount to double despite the fact that his authorized salary had not changed. He then began submitting false information to the payroll processor claiming he was entitled to amounts described as “Executive Loan” and, later, amounts described as “Misc Reimbursement,” including during irregular payroll cycle runs.

During this time, Shelton again increased his salary above the authorized amount and defrauded the company of even more money through misuse of the “Executive Loan” and reimbursement payment categories. Taxes were not withheld from both of these categories, nor were the amounts reported to the IRS.

Shelton submitted false tax returns to the IRS that falsely reported his income by not including the amounts he embezzled from the company.

The indictment charges Shelton with three counts of bank fraud, in violation of 18 U.S.C. § 1344(2); five counts 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. Shelton faces a maximum sentence of 30 years in prison, and a fine of $1,000,000, plus restitution, if appropriate, for each violation of 18 U.S.C. § 1344. Shelton faces a maximum sentence of 20 years in prison, and a fine of $250,000, plus restitution, if appropriate, for each violation of 18 U.S.C. § 1343. Shelton faces a maximum sentence of five years in prison, and a fine of $100,000 for each violation of 26 U.S.C. § 7201.

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.

Source: https://www.justice.gov/usao-ndca/pr/san-francisco-man-charged-tax-evasion-and-embezzling-27-million-san-francisco-company