MISSOULA – A Missoula couple and their accountant are denying federal charges accusing them of conspiring to defraud the federal government by skimming money from two businesses and failing to report that income on tax returns, U.S. Attorney Kurt Alme said.
Joseph Mark Baumgardner, 55, his wife, Traci Janelle Baumgardner, 48, both of Missoula, and their accountant, Daniel Brian Burke, 62, of Florence, pleaded not guilty to a 13-count indictment.
The indictment charges all three with conspiracy to defraud the United States, subscribing to a false document and aiding and assisting the subscribing to a false document.
If convicted of the most serious crime, the defendants face a maximum five years in prison, a $250,000 fine and three years of supervised release.
The indictment is merely an allegation and the defendants are presumed innocent until proven guilty.
U.S. Magistrate Judge Jeremiah C. Lynch presided. He continued the release of all defendants pending trial.
The indictment alleges that the Baumgardners, with Burke’s assistance, filed false tax returns for the years 2011 through 2013 for their two businesses, which are Splash Car Wash and Pro Sweep Plus. During the period, the two businesses earned gross receipts totaling $5,001,374 while the total tax paid over the same time period was $10,066.
Splash Car Wash operated two car washes, one in Hamilton and one in Missoula. Pro Sweep Plus is an industrial maintenance company. Both companies are based in Missoula.
Burke, a certified public accountant who owned and operated Burke and Company, P.C., prepared the Baumgardners’ tax returns.
The Baumgardners’ elected to have their companies taxed as flow-through entities, which are known as S Corporations. Corporate income and expenses are reported to the IRS, with the information ultimately flowing to the individual income tax returns.
The indictment alleges the Baumgardners skimmed cash from Splash Car Wash in 2012 and 2013, and with Burke’s assistance, did not report the skimmed cash on their corporate tax returns and, consequently, on their individual tax returns.
In addition, the indictment alleges the couple, with Burke’s help, inappropriately deducted personal expenses on their corporate tax returns for the two companies, and, consequently on their individual tax returns.