Source: Office of United States Attorneys
CHATTANOOGA, Tenn. – On February 26, 2025, Rebekah Proctor, 33, of Shelbyville, Tennessee, pleaded guilty in the United States District Court for the Eastern District of Tennessee in Chattanooga to one count of willful failure to collect, account for, and pay over a tax, in violation of Title 26, United States Code, Section 7202, and one count of wire fraud, in violation of Title 18, United States Code, Section 1343.
Proctor will be sentenced on July 11, 2025, by the Honorable Travis R. McDonough, United States District Judge. She faces up to five years of imprisonment on the tax offense and up to 30 years of imprisonment for wire fraud.
According to the plea agreement filed in this case, Proctor operated Franklin Springs Academy, a daycare business in middle Tennessee. Although she withheld income taxes and Federal Insurance Contributions Act (“FICA”) taxes (commonly known as Social Security and Medicare taxes) from her employees’ paychecks and additionally owed the employer’s portion of the FICA taxes, Proctor willfully failed to truthfully account for and pay such taxes to the IRS for the first quarter of 2022. For that quarter alone, she owed tens of thousands of dollars in unpaid taxes.
Proctor also fraudulently applied for and received a COVID-relief Paycheck Protection Program (“PPP”) loan to which she was not entitled. Proctor made several false certifications on her April 4, 2020, application for over $100,000 in PPP funds, including that she was current on her federal tax obligations and that the loan funds would be used to retain workers and for other business expenses. In fact, Proctor used the funds for her own personal expenses and for her husband’s personal expenses.
As set forth in her plea agreement with the government, Proctor agreed that the restitution owed to the IRS, for her employment taxes only, is $893,232.26, which includes unpaid taxes plus penalties and interest required by law. She further agreed that the restitution owed to the Small Business Association is $223,800, which is comprised of the $105,800 in PPP loan proceeds she received in April 2020 and $118,000 in additional fraudulently obtained PPP loan proceeds she received in February 2021.
United States Attorney Francis M. Hamilton III of the Eastern District of Tennessee and Special Agent in Charge Donald “Trey” Eakins of IRS Criminal Investigation, Charlotte Field Office, made the announcement.
Assistant United States Attorney Joseph G. DeGaetano represents the United States.
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