Brothers get 2 years in prison for tax scheme linked to polygamous sect
The Salt Lake Tribune/September 24, 2019
By Nate Carlisle
A federal judge on Tuesday sentenced two brothers to two years in prison for filing false tax returns for members of a polygamous sect on the Utah-Arizona line.
Alma T. and Denver T. Barlow, formerly of Hildale, filed over 700 false tax returns for themselves and members of the Fundamentalist Church of Jesus Christ of Latter-Day Saints, according to prosecutors. The brothers had pleaded guilty to a count of conspiracy to file false claims.
Charges against a third brother, Trenton T. Barlow, were dismissed in 2018. His attorney, Rudy Bautista, said prosecutors determined they couldn’t prove he had a role in the fraud.
In a news release announcing the sentencing Tuesday, U.S. Attorney for Utah John Huber said the defendants claimed over $9.7 million in false refunds for hundreds of clients who didn’t know Alma and Denver Barlow were not legitimate tax preparers. Neither Utah nor Arizona lists the defendants as being certified public accountants.
Neither the 2017 indictment nor Tuesday’s news release mentioned the FLDS or where the proceeds went. In 2017, one of the defendants’ half brothers, Ted Barlow, told The Salt Lake Tribune much of the money the brothers received likely went to the church leaders.
FLDS President Warren Jeffs, who is serving a life sentence plus 20 years in a Texas prison on charges related to sexually assaulting girls he married as plural wives, requires members to provide any surplus money to the bishop.
“Alma basically told me one time, ‘We’re told to get money for the church no matter what,’ ” Ted Barlow told The Tribune.
The two defendants have agreed to pay restitution, according to court filings.
The 2017 grand jury indictment describes a simple scheme. When filing their own tax returns, the defendants falsified W-2 forms to show they had far more tax withholdings than they actually paid.
In one example from the 2011 tax year, Alma T. Barlow told the IRS, according to the indictment, that $628,100 had been withheld from his paychecks. He asked for a refund of $429,003.
Alma and Denver Barlow co-owned a clothing manufacturer in Hildale called Most Wanted Jeans. Prosecutors allege Denver Barlow falsified business expenses to receive a tax refund of $45,168 for 2012.
The indictment also alleges the defendants sought out people in Hildale and Colorado City and asked to file their taxes for them. Working from Most Wanted Jeans in a business park with other FLDS-affiliated businesses, the defendants, according to court documents, misreported the filers’ incomes, marital status and number of dependents to make the filers qualify for an earned income tax credit, which can reduce the taxes that low- or moderate-income people pay.
The defendants took 10 percent of the refunds received by the other filers, the indictment says.
In court documents, prosecutors asked that the defendants receive 46 months in prison. The prosecutors argued the false returns caused tax problems for people who thought they were receiving professional assistance. There also was no evidence anyone in the FLDS ordered Alma and Denver Barlow to execute the scheme, prosecutors wrote. Court records say the brothers were kicked out of the FLDS in 2012, yet the fraud stretched from 2009 to 2014.
In their arguments for a lighter sentence, defense attorneys wrote that federal Judge Ted Stewart should take into account the FLDS culture.
“Actions against federal authorities,” defense attorneys wrote, “and federal institutions which benefited the community were proper and just based on the doctrine of that community, even though those acts were criminal acts.”
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