Accountant for alleged drug dealers charged

WASILLA — The U.S. Attorney’s Office on Tuesday charged a local tax preparer with filing false tax returns for drug dealers.

According to a U.S. Attorney’s Office press release and federal court documents, Rebecca Renae Powell, of Wasilla, who owned and operated AK Contractors Bookkeeping Services LLC, was charged with six counts of preparing false tax returns. Tuesday was, coincidentally, also the deadline for filing federal tax returns.

The U.S. Attorney alleges that in 2007, Powell started doing taxes for a longtime friend and his wife, who sold marijuana. The friend is identified in court documents only as D.J. and his wife as C.J.

“Powell knowingly omitted income that her friend earned from selling marijuana. It is alleged that, because the drug income was not reported, Powell’s friend was able to claim the Earned Income Credit for tax years 2003 through 2007,” according to he press release.

The Earned Income Credit, according to the Internal Revenue Service’s website, is a tax credit for low- to moderate-income households. Court records say D.J. was able to claim the credit retroactively for tax years 2003 through 2007, netting him $13,910.

“On at least one occasion, D.J. sold marijuana to defendant Rebecca Renae Powell,” according to court documents.

Also in 2007, Powell allegedly prepared taxes for a second person, this one a marijuana and heroin dealer. Court documents say this second alleged drug dealer, identified as D.H., also ran “at least two legitimate businesses.”

“In order to conceal this person’s illegal source income, Powell created the appearance that the income came from the individual’s legitimate business rather than from the sale of narcotics,” the press release states.

The U.S. Attorney alleges that deception included creating fake invoices, bills of sale and other business documents. The stated gross receipts for D.H.’s legitimate businesses for that year were $319,598, a figure the IRS said is much higher than what he actually brought in with non-drug-related business.

“In order to create fictitious bills of sale, defendant Rebecca Renae Powell used the telephone book and randomly chose the names of individuals listed there to use as ‘customers,’” according to court documents. “To create the fictitious purchase invoices, defendant Rebecca Renae Powell conducted Internet research to determine comparative prices for items of the type that D.H. would have sold as part of his legitimate businesses.”

Claiming the drug money as legitimate money allowed D.H. to apply for loans and otherwise “substantiate” his lifestyle, the indictment alleged.

Regardless of their legitimate business dealings, federal officials allege both D.H. and D.J. made most of their money from selling drugs.

In 2009, the IRS sent a special agent to Powell undercover, posing as a drug dealer in need of tax help.

“Powell followed the same scheme that she employed when preparing returns for D.H., including fabricating both income and expense figures as well as offering to create false invoices and other documents designed to substantiate the fabricated figures in the event of an audit or other inquiry,” according to court documents.

The tax returns, the feds allege, would help throw law enforcement off the trail of a drug dealer, since the money would be legitimized.

It was also allegedly lucrative for Powell. Non-criminal clients paid Powell $50 to prepare a return. D.H. and the undercover agent paid $1,000 and $1,200 respectively.

The charges carry up to three years in prison and a fine of up to $250,000.

Contact reporter Andrew Wellner at andrew.wellner@frontiersman.com or 352-2270.