Springville Woman Sent to Federal Prison in Embezzlement Scheme

A Springville woman who stole over $500,000 from her employer, a veteran-owned small business in Cedar Rapids, was sentenced on May 19, 2026, to more than three years in federal prison. Debra Ann Vaughn, age 67, from Springville, Iowa, received the prison term after a December 1, 2025, guilty plea to one count of bank fraud.

In a plea agreement and at her sentencing hearing, Vaughn admitted that she was the bookkeeper for a small, veteran-owned business in Marion, Iowa. By virtue of her position of trust, Vaughn had access to all of the company's financial records, managed its payroll, and was the point of contact for its employee retirement plan.

Between 2013 and 2021, Vaughn stole over $500,000 from her employer's bank account in a sophisticated embezzlement scheme. Vaughn created false entries in the employer's books to conceal the fact that she was making physical payroll checks to herself to which she was not entitled and even though she was receiving her own payroll electronically by direct deposit at the same time. Vaughn also used forged signatures and altered her pay rate in her scheme.

The company suffered a substantial financial hardship as a result of Vaughn's long-running fraud. The company's owner took out a large loan and also infused a significant amount of the owner's own funds into the business due to the company's lack of funds. For a time, Vaughn did not ensure that the company's federal and state taxes, or its employee retirement contributions, were paid, which had negative repercussions for the company.

Vaughn was sentenced in Cedar Rapids by United States District Court Chief Judge C.J. Williams. Vaughn was sentenced to 41 months' imprisonment. She was ordered to make $158,135.77 in restitution the company, which took into account a $373,732.27 inheritance that the company was able to seize from Vaughn in a state court civil case after discovering Vaughn's fraud and firing her. Vaughn must also serve a five-year term of supervised release after the prison term. There is no parole in the federal system.

In sentencing Vaughn to years in federal prison, Chief Judge Williams characterized Vaughn's scheme as a "cold and calculated, systemic theft." Chief Judge Williams found Vaughn's motive was "base, selfish greed" and that her crime eroded the community's trust.

Vaughn was released on the bond previously set and is to surrender to the United States Marshal on June 15, 2026.

The case was prosecuted by Assistant United States Attorney Timothy L. Vavricek and investigated by the Federal Bureau of Investigation.

Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.plLinks to other government and non-government sites will typically appear with the "external link" icon to indicate that you are leaving the Department of Justice website when you click the link..

The case file number is 25-CR-52.

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