Las Vegas Dry Cleaner Owner Pleads Guilty to Tax Obstruction

Las Vegas dry cleaner owner Judith Woodward, 58, admitted in federal court today to systematically sabotaging the IRS’s ability to collect taxes—lying for years on both business and personal returns while funneling hundreds of thousands in unreported cash into personal accounts.

Woodward, who operated Canyon Gate Cleaners through her LLC Canyon Enterprises, pleaded guilty to corruptly endeavoring to obstruct the due administration of internal revenue laws. From 2005 through 2009, she underreported gross receipts by failing to deposit cash earnings into business accounts and instead stashed them in personal banks or kept them off the books entirely.

She filed false U.S. Returns of Partnership Income (Forms 1065) during those years, providing her tax preparer with falsified records that excluded cash income. The hidden funds were used to pay for luxury vehicles, personal credit card bills, and other private expenses—while her business filings painted a picture of modest earnings.

Woodward also submitted false Individual Income Tax Returns (Forms 1040) for the same period, deliberately underreporting her share of partnership income from Canyon Enterprises LLC. When confronted by an IRS special agent in 2010, she doubled down—claiming all cash receipts had been deposited properly, that all income was reported, and that she never held more than $100,000 in cash between 2004 and 2009.

Those lies unraveled under investigation. Authorities determined Woodward caused a total tax loss of approximately $212,000. Her sentencing is set for March 9, 2017, where she faces up to three years in federal prison, supervised release, restitution, and steep monetary penalties.

The case was investigated by IRS-Criminal Investigation and prosecuted by Trial Attorneys Christopher S. Strauss and Eric C. Schmale of the Justice Department’s Tax Division. Principal Deputy Assistant Attorney General Caroline D. Ciraolo and U.S. Attorney Daniel G. Bogden commended the team for holding Woodward accountable in a case that exposed deep financial deception behind a seemingly ordinary small business.