Failure to declare money taken from non-profit group
leads to federal income tax sentence
Contact: Peter Deegan
The former director of a child assistance non-profit group who took the group’s money and failed to report that money as income was sentenced October 18, 2010, to more than one year in federal prison.
Margaret Ruth Waltz, who Iowa Courts Online shows is age 46 and from Dickinson County, Iowa, received the prison term after a June 21, 2010, guilty plea to one count of filing a false 2004 federal tax return.
Waltz was Executive Director of BASS, a nonprofit organization that provided before- and after-school 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 whose children 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. Waltz wrote checks to herself for $107,967.60 in 2002 through 2004 and made additional payments to herself of $58,400 during 2000 and 2001. In 2003, Waltz also paid for family vacations to the Virgin Islands and Mexico using nearly $20,000 from this account. In 2004, Waltz purchased a truck for her husband and paid $19,000 of the purchase price using money from this account. Waltz did not report as income the payments she made to herself from the account, the payments for her family vacations, or the payment for the truck. For 2004, she understated her income because she did not include at least $67,611.90 in benefits she received from the account.
The Spirit Lake Police Department investigated after receiving a complaint regarding questionable disbursement of BASS funds. The police department found questionable disbursements, and the State Auditor found more that $419,000 in disbursements from BASS from July 2000 through December 2004 that did not comply with IRS non-profit regulations. Following this audit, Waltz was charged with theft by the State of Iowa and was sentenced in October 2008 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 That probation was revoked in September 2010, and she was ordered to serve her prison term.
Waltz was sentenced in Sioux City by United States District Court Judge Mark W. Bennett. Waltz was sentenced to 15 months’ imprisonment and must also serve a 1-year term of supervised release after the prison term. She was ordered to make $52,530 in restitution to the Internal Revenue Service, and a special assessment of $100 was imposed. Her federal sentence was ordered to run concurrently with her state sentence.
The case was prosecuted by Assistant United States Attorney Sean Berry and investigated by IRS Criminal Investigation.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 10-4017.
