Grimy Times Exclusive: A stunning case of tax evasion has shaken the small town of Box Elder, Montana. Former Stone Child College President Melody Henry, 50, and her husband Frank Gregory Henry, 51, the former Facilities Manager at the College, have pleaded guilty to federal income tax fraud.
The Henrys face a potential sentence of three years imprisonment, a $100,000 fine and a year of supervised release, together with the costs of prosecution. Sentencing has been set for July 27, 2015, in the Missouri River Courthouse in Great Falls.
According to court documents, the Henrys had been indicted for taking almost a quarter of a million dollars in kick-backs from Hunter Burns and Hunter Burns Construction between October of 2010 and November of 2012. Melody Henry had approved $530,242 in contracts to Hunter Burns Construction in her role as President of Stone Child College.
The payments were never disputed but the Henrys claimed that he had, in addition to his full-time employment at the College, done work at the College on behalf of Hunter Burns Construction and therefore the payments were not kick-backs but payments for services rendered. A federal jury acquitted the Henrys after a three-day trial in February.
However, prosecutors alleged that the Henrys had attempted to evade payment on the monies received by them from Hunter Burns Construction by claiming business expenses in an amount that would eliminate any tax liability. For the tax year 2012, the Henrys claimed their salaries from Stone Child College—totaling $246,586—and business income from Hunter Burns Construction in the amount of $124,537 for a total annual income of $371,124.
On a Schedule C (Profit or Loss From Business), the Henrys claimed $135,146 in business expenses which completely off-set the income received from Hunter Burns Construction and resulted in a business loss. A forensic financial review of the defendants’ bank account records by the Internal Revenue Service did not reveal any expenditures consistent with the expenses claimed on Schedule C.
Prosecutors have agreed that if the civil IRS review indicates that some of the expenses claimed were legitimate, they would reduce the restitution award which will be, by stipulation of the parties, $47,301 in tax due and owing for 2012. All other tax liability, for other years, will be dealt with directly by the IRS.
The case was brought by the federal agents of the Guardians Project and was investigated by the agents of the Offices of Inspector General of the Departments of Interior, Health and Human Services, and the Environmental Protection Agency, as well as by the Internal Revenue Service Criminal Investigation Division.
In a shocking twist, the Henrys’ guilty pleas come after the acquittal of the same charges in February. The implications of this case are far-reaching, and Grimy Times will continue to follow this story as it develops.
Key Facts
- State: Montana
- Category: Public Corruption|White Collar Crime|Fraud & Financial Crimes
- Source: DOJ Press Release ↗
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