Former CEO if Middle Georgia daycares sentenced to prison in check kiting, tax schemes

A former Georgia daycare CEO has been sentenced to more than three years in prison and will be required to pay more than $1.3 million in restitution after pleading guilty to check kiting and tax schemes last year.

Ilene Farley, 62, of Stone Mountain was sentenced by U.S. District Judge Marc T. Treadwell on April 12. Her prison sentence of 37 months will be followed by three years of supervised release.

This sentencing comes after Farley pleaded guilty on Nov. 16 for bank fraud and failure to pay over trust fund taxes.

As CEO and president, Farley was responsible for handling the finances of Tender Years Learning Corporation (TYLC), a Georgia-based company that operated 17 daycares within the state. Seven locations were in Macon and Warner Robins.

Check kiting involves taking advantage of the time known as the “float” between the presenting of a check and the receipt of funds in order to use non-existent funds in a checking or other bank account. By falsely inflating a bank account balance using this method, written checks that would have bounced are able to clear.

From April of 2018 to July of 2019, Farley sent more than $75 million in unfunded amounts through TYLC’s Bank of America and Citizens Trust Bank accounts using a check kiting scheme, according to the justice department.

Bank of America discovered the scheme in July of 2019 and promptly closed Farley’s accounts. By then Bank of America had lost $514,240, court records show.

Farley also engaged in trust fund tax fraud, according to the justice department. As CEO of TYLC, Farley was required to withhold and pay trust fund taxes for her employees, including Medicare, Social Security, and federal income taxes. Employers are required to send these funds to the IRS every quarter.

From 2015 to 2019, Farley withheld $844,091.77 worth of trust fund taxes from employees’ paychecks that was never sent to the IRS, the DOJ said.

The DOJ said that when Farley pleaded guilty, she admitted to knowingly defrauding Bank of America and Citizens Trust Bank in addition to not paying trust fund taxes.

Her $1.3 million owed in restitution will be split with $514,240 going to Bank of America and $844,091 going to the IRS.

Farley’s case was investigated by the FBI and the IRS.

This story was originally published April 17, 2023 at 11:56 AM.