AP NEWS

Former Spa Owner Hit With Federal Tax Charges

February 21, 2019

WILKES-BARRE — A Mountain Top woman who admitted stealing at least $100,000 from a Kingston spa she co-owned has been hit with federal charges alleging she failed to hand in more than half a million dollars in payroll taxes.

Federal prosecutors say Judith Cefaly, 55, of 78 Basswood Drive, Rice Twp., failed to remit to the Internal Revenue Service more than $646,000 in taxes she withheld from paychecks between 2011 and 2016.

Court records show Cefaly has entered into a plea agreement and will admit guilt to a count of failing to remit taxes, which caries a maximum penalty of five years in prison. The plea agreement says prosecutors reserve the right to recommend up to the maximum sentence.

She is scheduled to plead guilty before U.S. District Court Judge James M. Munley next Wednesday.

The tax offense allegedly took place at Shakti Day Spa at 311 Market St., Kingston. According to the charges, Cefaly was a 20 percent owner and the general manager of the business during the relevant period.

Last week, Cefaly pleaded guilty to a felony theft charge after being accused of stealing at least $100,000 from the business that she used for personal expenses.

Business majority owner Leon “Lonny” McLaughlin has previously said that nearly $919,000 went missing from the business’ account — money that did not have receipts indicating it was used for business expenses. 

McLaughlin provided police with bank statements showing that between May 2010 and December 2016, Cefaly had spent more nearly $919,000 belonging to Shakti, according to prosecutors.

Prosecutors say Cefaly subsequently admitted using a Citizens Bank debit card issued to Shakti to make business as well as personal transactions, and that she had spent at least $100,000 of the missing money for her personal use.

Cefaly gave up her interest in the business and resigned as general manager in February 2017, after being confronted about the stolen money.

She remains free on $100,000 unsecured bail in that case, with sentencing set for April 5.