Spirit Lake woman sentenced for filing false tax return
SPIRIT LAKE, Iowa -- A Spirit Lake woman accused of taking money from a non-profit group was sentenced to more than a year in federal prison after pleading guilty to one count of filing a false 2004 federal tax return.
Margaret Ruth Waltz, 46, of Spirit Lake, was executive director of BASS, the Before and After School Services program that provided care to children enrolled in Head Start, Department of Education at-risk programs and early childhood special education programs. BASS received funds from the Iowa Department of Human Services, private grants and fees charged to parents who participated in the program.
Waltz set up a BASS bank account from which she took money for her own benefit and the benefit of her family. She wrote checks for $107,967 in 2002 through 2004 and made additional payments to herself of $58,400 during 2000 and 2001. In 2003, Waltz paid for family vacations to the Virgin Islands and Mexico using nearly $20,000 from the account. In 2004, she purchased a truck for her husband and paid $19,000 of the purchase price using money from the account.
Waltz did not report as income the payment to herself from the account, the payments for the family vacations or the payments for the truck.
The Spirit Lake Police Department investigated after receiving a complaint regarding questionable disbursement of BASS funds. The state auditor found more than $419,000 in disbursements from BASS between July 2000 and December 2004 did not comply with IRS non-profit regulations. Following the audit, Waltz was charge with theft by the State of Iowa and was sentenced to a suspended 10-year prison term and five years probation. That probation was revoked in September 2010, and she was ordered to serve her prison term.
The federal prison term will run concurrently with the state sentence. She was ordered to make $52,530 in restitution to the IRS.