Though Talley said in a suicide note hed been stealing company funds for at least seven years, the $1.3 million Smiley seeks is from the past four years, the lawsuit notes, and lists dozens of checks made out to Talleys wife and children or their benefit.
Cheryl Talleys attorney, Lee Kutner, did not offer any comment on Smileys allegations.
The lawsuit is the latest in Smileys efforts to recoup millions of dollars he said Richard Talley drained from the apparently successful company, mostly for himself but also to pay professional debts with other insurance companies he represented.
Smiley said Cheryl Talley knew as long ago as 2002, when Richard Talley filed for personal bankruptcy, that he had financial troubles.
In that bankruptcy, Talley listed debts that arose from a pair of business partnerships he had GC Funding Inc. and Buycor Inc.
Records show his partners in those ventures James Taylor and Jeffrey Parsley each would plead guilty to separate federal fraud charges apparently unconnected to the businesses.
A third partner, William Krieg, would later become ATSs controller and admit in the bankruptcy case that he knew of Talleys embezzlement.
Taylor pleaded guilty to felony wire fraud in January 2013 he had been on the run for more than five years for his part in obtaining phony mortgages and was ordered to pay nearly $200,000 in restitution, US District Court records show.
Parsley was disbarred as an attorney in Colorado after he pleaded guilty in 2005 to felony bank fraud tied to a phony mortgage he took on his parents home and pocketed the cash, records show.
Also, Smiley said Richard Talley in 2000 had transferred his interest in the couples home near Cherry Creek State Park to his wife, but didnt reveal it to the bankruptcy court as is required.
Talley committed suicide Feb. 4, 2014, in the garage of the house because, according to a typed note, his years of financial fraud had been exposed and he feared prison.
Central to the ATS bankruptcy is the beneficiary of a $1 million life insurance policy on Talley. He had mailed a request to switch the beneficiary from ATS to his wife the day before he died. The insurance company has asked the federal court to determine who will get the cash. Smiley said in the claw-back lawsuit that ATS funds were also used to pay premiums on a life insurance policy for Cheryl Talley.
In June 2014, Cheryl Talley sold the couples house for $650,000, Arapahoe County property records show, then paid $365,500 months later for a home in east Denver, county records there show.
Smiley alleges funds from those transactions also belong to ATSs bankruptcy and its creditors.
The trustee said Cheryl Talley additionally profited from her husbands scheme by selling a pair of properties last year that had been owned by companies Richard Talley initially controlled Peregrine Hollow and Swift Basin and for which records show she took command after his death.
Smiley said Richard Talley also purchased property in West Lafayette, Ind., then transferred its title to his wife and children in mid-2013.
Smileys lawsuit is the latest in a number of revelations and twists that have surfaced since Talleys suicide. Last week Smiley filed a different claw-back lawsuit against Title Resources Guaranty Co., a Texas insurance underwriter for whom Talley sold title policies, alleging it had unfairly ensured it would collect on Talleys debts before other creditors by taking control of its books.
It was TRGCs auditors who uncovered Talleys wrongdoing. They were to meet with him the day he died.
TRGC filed its own lawsuit last year alleging it is still owed at least $2 million it said Talley misappropriated. TRGC said it had not found anything to implicate Cheryl Talley. A grand jury was impaneled after Talleys death, but no charges were filed in that inquiry.
Employees have filed claims that money withheld from paychecks and earmarked for retirement accounts never made it there. The US Department of Labor filed a lawsuit on behalf of those employees, and a settlement is said to be forthcoming.
Several ATS customers filed bankruptcy claims saying escrowed funds due them from the sale of houses they owned were never sent to them.
David Migoya: 303-954-1506, firstname.lastname@example.org or twitter.com/davidmigoya