A Greenwood woman pleaded guilty to tax evasion and will pay $125,000 in restitution.
Sherry Nowacki, 39, also was sentenced to six months in federal prison, and then two years of probation, including six months of electronic monitoring.
Investigators said Nowacki did not pay more than $80,000 in federal taxes for seven years, between 2004 and 2015, with amounts ranging from $700 to more than $28,000, and that she had transferred and withdrawn money she received to hide it from the Internal Revenue Service, according to court filings.
“U.S. taxpayers should not be required to foot the bill for fellow citizens that refuse to pay their share. Unfortunately, Ms. Nowacki did not share this belief. Instead, she engaged in several criminal acts to evade the payment of her tax including filing a false document with the IRS and structuring cash withdrawals to hide assets. Her prosecution is a reminder of the real consequences of tax evasion. These consequences include a felony conviction, prison time, restitution payments and loss of certain rights,” Gabriel Grchan, IRS Criminal Investigation Special Agent in Charge, said in a statement.
In October, Nowacki was charged with tax evasion. Last week, Nowacki agreed to plead guilty to the charge and to $125,000 in restitution, which includes the back taxes owed, along with penalties and fines, according to the filing.
In September 2015, Nowacki’s husband received $125,000 in a legal settlement, which he signed over to Sherry Nowacki. During the next two weeks, about $37,000 of that money was spent, including in a cashier’s check to repay a loan to a family member and in cash withdrawals, according to court documents.
Nowacki then went to the bank and asked to withdraw the remaining $88,000, but was told the bank did not have that much cash. Nowacki told the teller she needed to get the cash before the bank reported it to the IRS. She then set up multiple cash withdrawals and cashier’s checks to herself in amounts of $10,000 or less which do not have to be reported to the IRS, court documents said.
In November 2015, Nowacki worked with the IRS to reach a settlement for unpaid taxes for herself and her husband, agreeing to pay $11,348, which she said would be paid by selling items they owned, court documents said.
On her forms filed with the IRS, Nowacki did not report the $45,000 in cashier’s checks and more than $13,000 in cash she had at the time. She also told an IRS employee she had spent the settlement money on bills and had spent all the money, court documents said.
Last year, when investigators interviewed her, Nowacki told them they had kept much of the legal settlement they received at home in cash and cashier’s checks because they worried the IRS would take it. She also told them she didn’t report the correct amounts because she wanted to be able to negotiate a lower settlement amount for her back taxes, court documents said.
Nowacki did not make any payments on the taxes owed, according to court documents.