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Home News-Telegram News Hopkins County woman sentenced for tax crimes: Accused of underreporting $479,000 to IRS

Hopkins County woman sentenced for tax crimes: Accused of underreporting $479,000 to IRS

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A 47-year-old Sulphur Springs woman has been sentenced to federal prison for tax crimes in the Eastern District of Texas, according to a press release issued this week by U.S. Attorney John M. Bales.

Donna J. Nelson pleaded guilty on Jan. 13, 2009, to an Information charging her with filing a fraudulent tax return and was sentenced Wednesday to one year and one day in federal prison by U.S. District Judge Leonard E. Davis in Tyler.

Nelson was ordered to surrender to the U.S. Marshals Service on Oct. 19, 2009, to be transported to federal prison and begin serving her sentence.

Nelson had faced up to three years in federal prison at sentencing.

According to information presented in court, Nelson admitted to filing a false Form 1040 federal tax return for tax years 2002 through 2006. During that time, she underreported her adjusted gross yearly income by a total of $479,781.36, representing additional taxes owed of $135,171.24.

According to the information from the U.S. Attorney’s Office, the case was investigated by the Sulphur Springs Police Department and the Internal Revenue Service’s Criminal Investigations Division, and prosecuted by Assistant U.S. Attorney Jim Middleton.

The IRS’s involvement came after Sulphur Springs Police Det. Rusty Stillwagoner wrapped up months of work on a case involving a local attorney’s office.

The local investigation began in December of 2006 after Sulphur Springs police were contacted by Gregg Price, one the city’s more prominent and respected attorneys, who suspected that an employee had been stealing money from his office.

Over the next four months, Stillwagoner collected a small mountain of evidence — a stack of paperwork some two feet high of audits and subpoenaed bank records and other data — before wrapping up his inquiry in March of 2007.

“We believed about half a million dollars was embezzled over a period of years,” Stillwagoner told the News-Telegram in January, when Nelson entered the guilty plea to filing a false federal tax return from 2002 through 2006, underreporting $479,781.36 in income.

Police considered filing the case as a first-degree felony theft — meaning at least $200,000 had been taken — which carries a minimum punishment of 5 to 99 years and up to a $10,000 fine.

However, no one was ever arrested, indicted or otherwise formally charged with theft, embezzlement or any other offense in connection with the investigation. Instead, the case was referred to the U.S. Attorney’s Office.

“We discussed it with Gregg Price at the time and the district attorney in reference to this. We  decided the best course of action was to file it at the federal level since [the employee] had ties to the legal community here,” Stillwagoner said in January. “She’d worked in the legal profession for a number of years.”

Local authorities said earlier this year they could still pursue state charges if necssary. According Chapter 12 of the Texas Code of Criminal Procedure, the statute of limitations for felony ehfts do not run out until five years afer the date of the commission of the offense.

 

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