CEO With Peninsula Ties Pleads Guilty In $550K Foster Care Scam: DOJ

SANTA CLARA COUNTY, CA — A South Bay CEO accused of using funds intended foster care recipients for personal use pleaded guilty to fraud charges Tuesday, the Department of Justice said in a news release.

Annie Corbett, a 55-year-old former Redwood City resident, pleaded guilty to one count wire fraud, the DOJ said. She faces a maximum prison sentence of 20 years and a fine of $250,000.

She also pleaded guilty to willful failure to pay over employment taxes in violation, which carries a maximum prison sentence of five years and a $250,000 fine, the DOJ said.

Corbett remains out of custody pending her sentencing hearing, which is scheduled for Jan. 31.

She was initially charged Oct. 30, 2020, with wire fraud in connection with her operation of Corbett Group Homes, a company that provided foster care for children and adolescents in group homes located primarily in San Jose.

Corbett was the owner, CEO and President of CGH from 2011 through mid-2018, when CGH employed about 60 employees a year.

Corbett admitted in her plea agreement that she knowingly failed to pay employment taxes, and that she deceived her bookkeeper and CPA into believing the employment taxes had been paid despite not paying any taxes to the IRS, the DOJ said.

She described issuing several checks from a CGH account to the U.S. Treasury and gave copies of them to CGH’s bookkeeper to create the appearance that the taxes had been paid, but instead of providing the checks to the U.S. Treasury, Corbett changed the name of the checks’ payee and deposited the funds into an account she controlled, the DOJ said.

Corbett admitted in her plea agreement that from 2014 through 2017 she failed to pay employment taxes to the IRS in an amount totaling more than $752,000.

She described the fraud she committed involving funds CGH received directly from local county governments and private charities to support CGH’s care of foster children.

Corbett controlled multiple CGH bank accounts and diverted funds deposited in CGH’s business accounts into personal bank accounts.

Corbett used the diverted funds for her personal enrichment, including making her own credit card payments, her personal retail business payments, and her payments on a vacation timeshare. Corbett agreed in her plea agreement to a fraud loss amount that exceeded $550,000.