November 18, 2010 in City

Couple sent to prison for tax crimes

By The Spokesman-Review

A former Colbert couple who made millions selling porcelain figurines, have been sentenced to federal prison for refusing to pay more than $800,000 in income taxes.

Scott D. and Kristin W. Haynes, both 56, pleaded guilty late Tuesday to five counts of failing to file tax returns for the years 1999 through 2003. They were arrested June 22 when they traveled to Florida after living for several years on a tropical island in the Caribbean that is part of Honduras.

Kristin Haynes is the artist and creator of figurines sold nationwide under the Dreamsicles trademark. Scott Haynes was a 50 percent shareholder in the corporation, from which the couple earned royalties from the sales of her creations.

It’s the second federal conviction for tax evasion for Scott Haynes, who previously served 21 months in prison. In this most recent case, U.S. District Court Judge Justin Quackenbush sentenced Scott Haynes to serve 40 months and Kristin Haynes to two years in federal prison.

“Mr. Haynes is a repeat customer when it comes to federal tax convictions,” said Dan Wardlaw, special agent and public information officer for Internal Revenue Service Criminal Investigation. “Maybe this time, he will learn.”

As part of the sentence, the couple was ordered to pay $833,781 to the IRS for unpaid taxes.

During the five years the couple refused to file tax returns, their income was more than $2.7 million, Assistant U.S. Attorney Tom Rice said.

Shortly after Scott Haynes got out of federal prison from his earlier conviction, which also carried a requirement that he pay $1.2 million in back taxes, the couple moved to Roatan, Honduras. That country currently has no extradition agreement with the United States.

Sources could not quickly determine Wednesday whether Haynes ever paid back the $1.2 million owed from the first case.

Both were indicted by a grand jury on March 24 and were arrested when they landed on June 22 at an airport in Fort Lauderdale, Fla.

“The privilege of living well in the United States carries certain burdens, one of which is the voluntary payment of taxes,” said Mike Ormsby, the new U.S. attorney for the Eastern District of Washington. “The system only works when everybody pays their fair share.”

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