COLUMBUS - David W. Spellman, age 42 of Johnstown, Ohio today pled guilty to one count of willful failure to file an income tax return in 1995 when he had a gross income of $94,569.

Gregory G. Lockhart, United States Attorney for the Southern District of Ohio, in conjunction with Cromwell Handy, Special Agent in Charge, Internal Revenue Service, Cincinnati, announced the plea Spellman entered today before U.S. Magistrate Judge Terence P. Kemp.

According to a statement of facts presented in court, Spellman operated a gun shop in Pataskala. He used his merchant account for processing credit card receipts to enter credit card receipts for John and Tracy Canter, who owned adult conversation telephone services. The Canters had a difficult time obtaining merchant accounts at banks because the Canters were in the adult entertainment industry, according to the IRS statement of facts

Spellman kept a fee for processing the credit card receipts. The IRS says more than $1.6 million was processed through Spellman's accounts between 1995 and 1999. More than $1.5 million of that came from the phone sex business. From 1995 through 1997, Spellman charged the Canters 15.75 percent of the total amount of credit card receipts he processed for them. In 1998, he changed the fee to 16 percent.

Magistrate Judge Kemp will set a sentencing date for Spellman. He faces up to one year in federal prison, a fine of $100,000, the costs of prosecution, as well as payment of taxes, interest, and penalties due. The amount Spellman must pay will be determined before sentencing.

Lockhart commended the efforts of the Internal Revenue Service Criminal Investigation Division, and Assistant U.S. Attorney Brenda Shoemaker who prosecuted the case.