A Shelbyville woman has admitted her role in a tax and wire fraud scheme, agreeing to pay back over $1.1 million, according to the U.S. Attorney's Office for the Eastern District of Tennessee. On Tuesday, Rebekah Proctor, 33, pleaded guilty to failing to account for and pay employment taxes and wire fraud in Federal Court in Chattanooga. Her sentencing is set for July 11, 2025.
Proctor, who ran a daycare in middle Tennessee named Franklin Springs Academy, kept back income taxes and FICA taxes from her employee paychecks but didn't remit these funds to the IRS. The owed taxes for just the first quarter of 2022 were in the tens of thousands. She also lied on a Paycheck Protection Program loan application, securing over $100,000 in April 2020 and another $118,000 in February 2021, funds she spent on personal luxuries rather than business-related expenses, as she had asserted in her fraudulent application.
The terms of Proctor's plea agreement with federal prosecutors have her slated to repay $893,232.26 for employment taxes, including penalties and interest, and an additional $223,800 for the fraudulently obtained PPP loans, as reported by the Justice Department announcement.
This case was brought to light by the United States Attorney Francis M. Hamilton III of the Eastern District of Tennessee and Special Agent in Charge Donald “Trey” Eakins of the IRS Criminal Investigation. Assistant United States Attorney Joseph G. DeGaetano will be representing the United States at the upcoming sentencing hearing, where Proctor could face up to five years in prison for the tax offense and up to thirty years for wire fraud, showcasing the gravity of financial crimes and their impact on the community and government trust.
