Seattle - An Enumclaw, Washington couple were charged in U.S. District Court in Seattle today in connection with their six-year scheme to divert more than $400,000 in local tax dollars to their own use, announced U.S. Attorney Brian T. Moran. ALLAN B. THOMAS and JOANN E. THOMAS are scheduled to appear on the federal charges in U.S. District Court in Seattle at 2:00 p.m. today.
According to the criminal complaint, ALLAN B. THOMAS served as Commissioner for Drainage District 5 in King County for more than 35 years. As a commissioner, THOMAS was involved in estimating the costs of drainage maintenance for the district so that the county auditor could set and assess the appropriate taxes. The Commissioners then authorized payment to service providers who were supposed to do maintenance work on the drainage system.
As early as 2012, JOANN THOMAS set up a joint bank account with ALLAN THOMAS’ son from a previous marriage. The account was a business account for a company called A C Services. Over the next six years, ALLAN THOMAS had $413,323 of local tax dollars paid to A C Services claiming it was for drainage ditch maintenance. However, THOMAS’ son said other than two small jobs performed in 2012, he did not perform any drainage ditch work. Financial records indicate that over the six years, shortly after the tax dollars were deposited into A C Services account, the money was quickly transferred to other accounts belonging to the THOMASES, or was used to pay their expenses for such things as hay, mortgage payments, or property taxes. More than $70,000 was withdrawn as cash.
In 2018, after the couple became aware of an investigation into their conduct, they began funneling the tax dollars through another company: City Biz. The couple submitted warrants for City Biz to be paid for drainage maintenance work and within days of the funds arriving in City Biz bank accounts, nearly all of the money was transferred directly to ALLAN THOMAS or the THOMASES’ dairy farm. In all the criminal complaint alleges the THOMASES defrauded taxpayers of $468,165.
The charges contained in the complaint are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
Mail fraud is punishable by up to 20 years in prison and a $250,000 fine.
The FBI and IRS - Criminal Investigation are leading the investigation with assistance from the Enumclaw Police Department. The Enumclaw City Attorney initiated the review of the district finances. The Washington State Auditor’s Office also conducted an audit of the district in 2019. The King County Prosecuting Attorney’s Office, in consultation with the U.S. Attorney’s Office, determined the case was appropriate for federal prosecution.
The case is being prosecuted by Assistant United States Attorneys Justin Arnold and Andrew Friedman.
Source: U.S. Department of Justice, Federal Bureau of Investigation (FBI)
