A member of the Skagway Assembly plans to plead guilty to federal charges of failing to file tax returns and has agreed to pay back more than $600,000 to the government as part of a plea deal.
Daniel Henry signed off on the plea agreement, which includes four criminal counts of willfully failing to file tax returns, on Wednesday. According to the court document, Henry did not file individual income tax returns from 2004 to 2012.
The hundreds of thousands in taxes Henry agreed to return is income from his restaurant, Skagway Fish Co.
From at least 2008 to 2012, Henry and a family member made cash deposits at a bank -- always between $9,000 and $9,900 -- in an attempt to avoid required income reports, the plea deal says. It also states Henry filed financial disclosure reports with the Alaska Public Offices Commission from 2009 to 2012 claiming he made no more than $1,000 from self-employment in each of those years.
Assistant U.S. Attorney Jack Schmidt said in a phone interview that income tax cases generally emerge when the Internal Revenue Service sends notices to people it believes haven't filed taxes. If those notices go unanswered or continue unresolved, a criminal investigation begins. Schmidt wouldn't go into specific detail on how the investigation into Henry's tax records began.
The charges carry a possible year in prison and fines of up to $100,000 for each criminal count -- up to a maximum of four years in prison and $400,000 in fines -- and a single year of supervised release. But the plea agreement stipulates the government will seek a sentence of no more than two years in prison, and Henry will argue for no less than eight months behind bars.
Skagway officials did not immediately return calls for comment on the case Friday. On the Skagway Borough's website, Henry is listed as the Assembly's finance committee chair. The website says his term expires in October 2017. Schmidt confirmed the restaurant owner charged in federal court is the same person.
Anchorage attorney Bob Bundy, who is representing Henry, said the charges his client is pleading guilty to are misdemeanors.
"One thing that should be noted is that this was just a failure to file a timely tax return," Bundy said. "All of this other tax obligations … have never been delinquent. It's also been current. There are no failures on other fronts."