Real Estate Developer & girlfriend hit with $23M tax evasion

justice-dept-usFormer Real Estate Developer And His Long-Time Girlfriend Convicted Of 25 Counts For Tax Evasion Scheme
— Second Tax Evasion Conviction for Defendant who Failed to Report more than $23 million in Income
Western District U.S. Dept of Justice

A former western Washington real estate developer and his long-time girlfriend were convicted today in U.S. District Court in Seattle of 25 counts of tax evasion and false statements related to their scheme to avoid paying taxes on more than $23 million in income, announced U.S. Attorney Jenny A. Durkan. WINSTON BONTRAGER, 64, and PAULINE ANDERSON, 65, were indicted in March 2012, and have been in federal custody since June 2012. The jury deliberated about 3 days following a four week long jury trial. Jurors convicted the two on all counts presented by prosecutors. U.S. District Judge Richard A. Jones scheduled sentencing for November 22, 2013.

For WINSTON BONTRAGER, it is a second conviction for tax crimes and third federal criminal conviction. BONTRAGER was previously convicted in 1983 for bank fraud and in 1994 for defrauding the Oregon Public Employees Retirement System and the IRS of over $687,000. In 1994 he was sentenced to 40 months in prison. Some of the convictions returned today are for BONTRAGER’s false statements surrounding his failure to pay more than $687,000 in restitution from his prior conviction. During the trial prosecutors detailed how BONTRAGER and ANDERSON filed false tax returns from 2004-2009, failing to report more than $23 million in income and failing to pay more than $2.7 million in taxes. Over $10 million was moved into foreign bank accounts in PAULINE ANDERSON’s name, and virtually all of the couples’ assets were put in ANDERSON’s name in order to hide it from the IRS and those seeking to enforce BONTRAGER’s restitution obligation and collect delinquent taxes. At the same time that the couple paid little in income taxes, they purchased a luxury condominium in Bellevue and spent approximately $500,000 on an extensive remodel. They owned a $325,000 wine collection, a $1.2 million home in Southern California, a 6.7 carat diamond ring, a Bentley worth $186,000, and they spent over $3.4 million in credit card purchases, including travel, cosmetic surgery, cosmetic dentistry, restaurants, and clothing and shoes.

Prosecutors told the jury the case was about “fraud, deceit, and evasion,” and they urged jurors to “follow the money” to see how BONTRAGER and ANDERSON made millions of dollars but refused to pay a single dime for BONTRAGER’s restitution obligation, delinquent taxes, or in income tax. Prosecutors described various development deals in Vancouver, Washington where BONTRAGER made millions of dollars, in some instances defrauding business partners as well as the IRS.

The tax crimes of conviction are each punishable by between three to five years in prison, and the false statement convictions are also punishable by up to five years in prison. BONTRAGER was convicted of nine tax counts and eight counts of making false statements. ANDERSON was convicted of 11 tax counts.

The case was investigated by the Internal Revenue Service Criminal Investigation. The case was prosecuted by Assistant United States Attorneys Carl Blackstone and Aravind Swaminathan.

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