JOHNSTOWN — Two Northern Cambria residents have pleaded guilty in federal court to charges of violating federal tax, anti-fraud and money laundering laws, U.S. Attorney Eric G. Olshan said.

On Aug. 2, Sarah Stiles, 38, and David Bachik, 52, pleaded guilty to two counts each before Senior U.S. District Judge Kim R. Gibson.

According to the criminal Information, Stiles served as vice president of Life Changing Support Services, a Northern Cambria company that provides housing to individuals with intellectual disabilities.

Stiles was personally responsible for the withholding and payment of employment taxes related to LCSS employees. In connection with the guilty plea, in the quarter ending in December 2019, Stiles failed to remit to the Internal Revenue Service payroll taxes of $21,285. Additionally, Stiles admitted to willfully failing to pay a total of $2,063,544 in employment taxes between March 2013 and December 2019. Further, on or about Aug. 2, 2019, and continuing until Feb. 26, 2020, Stiles and Bachik agreed to commit wire fraud.

According to the criminal Information, around 2019, Stiles was removed as a signature authority from LCSS bank accounts but remained in her role as vice president. Stiles and Bachik believed that Stiles was being unfairly compensated as compared to other LCSS officers/employees. Thus, it was the object of the conspiracy for Stiles and Bachik to embezzle and steal LCSS monies for themselves, a release said.

Accordingly, Stiles and Bachik devised a scheme by which Stiles would direct payments from LCSS to a fake company controlled by Bachik, and Bachik would disburse the stolen money to Stiles and himself. To that end, in 2019, Stiles and Bachik agreed to form Stonewall Business Management, a fictitious company to receive payments from LCSS.

Stiles deceived LCSS into believing that SBM was a legitimate business that offered workers’ compensation and general liability insurance.

From on or about July 3, 2019, to on or about Feb. 28, 2020, Stiles deceived LCSS into issuing 12 cashier’s checks totaling $56,308 to SBM which Bachik deposited into bank accounts held in the name of Stonewall Business Management. Additionally, on or about Aug. 14, 2019, Bachik, did knowingly conduct and attempt to conduct a financial transaction affecting interstate commerce, which involved the proceeds of specified unlawful activity, knowing that the property involved represented the proceeds of some form of unlawful activity and knowing that said financial transaction was designed in whole or in part to conceal the location, source, ownership and control of the proceeds of specified unlawful activity.

Bachik withdrew from one Stonewall Business Management bank account $9,000 in LCSS funds as a result of the fraud scheme.

Gibson scheduled sentencing for Dec. 6. The law provides for a maximum total sentence of 20 years in prison, a fine of up to $500,000, or both.