Enumclaw taxing district commissioner, wife sentenced for stealing $468K from taxpayers
An Enumclaw man, the longtime commissioner for an East King County taxing district, and his wife have been sentenced to federal prison for stealing more than $468,000 from taxpayers through a fraud scheme they operated for several years.
A federal jury in Seattle convicted Allan Thomas, 70, and Joann Thomas, 67, in May of conspiracy and aggravated identity theft, in addition to four counts of wire and mail fraud, according to the U.S. Attorney’s Office for the Western District of Washington. Joann Thomas was also found guilty of four counts of money laundering and another count of aggravated identity theft.
U.S. District Court Judge Richard Jones sentenced Allan Thomas to 30 months in prison and three years of supervised release on Friday, according to the U.S. Attorney’s Office. Jones sentenced Joann Thomas to three years in prison and three years of supervised release last month.
“You were a public officer in a position of trust… People trusted you not to enrich yourself,” Jones said during Allan Thomas’ sentencing according to the U.S. Attorney’s Office. “These funds were ill-gotten gains, they were not earned…. It was a breach of trust.”
As Commissioner for King County Drainage District 5 and 5A for more than 35 years, Allan Thomas’ role was to help estimate maintenance costs for the county auditor to assess taxes and then authorize payment to service providers, according to a news release.
As early as 2012, Joann Thomas set up a joint business bank account for her husband’s son from a previous marriage, according to court records and testimony cited in a news release. Allan Thomas funneled more than $413,000 to his son’s business for drainage ditch maintenance and flood control.
But the business didn’t exist.
“Mr. Thomas and his wife treated taxpayer money as if it was their own,” U.S. Attorney Nick Brown said in a statement. “And they repeatedly lied, claiming tax dollars for ditch maintenance work that was never performed. They not only cheated taxpayers out of money, they also increased the risk of damage from flooding due to an overgrown drainage ditch network.”
At trial, Thomas’ son testified he only performed two small jobs in 2012 when he was just out of high school, according to a news release. A current drainage district commissioner said he observed that the ditch network had received little maintenance for years.
Financial records presented in court showed the Thomases transferred the money from the shell business account to pay personal expenses, such as mortgage payments, taxes and supplies for their dairy farm, according to a news release. They also withdrew more than $68,000 in cash.
The Thomases forged the signatures of Allan Thomas’ son and another drainage commissioner on records and checks as a part of the scheme, according to a news release.
After learning of an investigation into their fraud in 2018, the Thomases set up another sham company to divert taxpayer dollars to, according to a news release. A friend who helped them continue the fraud has been convicted for repeatedly lying to the FBI.
The IRS and FBI led the investigation of the Thomases with assistance from the Enumclaw Police Department, according to a news release. The Enumclaw City Attorney and Washington State Auditor’s Office also reviewed the taxing district’s finances.
