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Tuesday, October 9, 2018

Former Manager for a Colorado Resort Sentenced to Prison for Tax Fraud

Did Not Pay Taxes on More Than $9.7 Million in Income Earned in Offshore Bank Accounts and Nearly $1 Million From Pagosa Springs, Colorado Resort & Spa

A Scottsdale, Arizona man, who formerly resided in Pagosa Springs, Colorado, was sentenced today in the U.S. District Court for the District of Colorado to eighteen months in prison for filing a false tax return, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division. 

According to court documents, William Whittington, 68, filed a false 2010 individual income tax return, on which he underreported income received from his offshore accounts and through the payment of his personal expenses by an entity over which he exercised managerial control. From 2010 to 2012, Whittington directed that the Springs Resort & Spa, in Pagosa Springs, Colorado, a business managed by Whittington and family members at the time, pay over $1 million of his personal expenses. The total additional tax due for those three years, 2010 through 2012, based on Whittington’s failure to report the payment of the personal expenses as income is $364,994.00.

From 2003 to 2010, Whittington failed to report $9.7 million in investment income generated through two offshore bank accounts in Liechtenstein. Combined with the tax loss from the resort payment of his personal expenses, Whittington’s fraudulent conduct created a $1.8 million tax loss.

Whittington is a competitive racecar driver, whose team won the 1979 24 Hours of Le Mans. Whittington was previously sentenced to prison in 1987 for evading income tax and importing multiple tons of marijuana. See United States v. Whittington, 918 F.2d 149 (11th Cir. 1990).

In addition to the term of imprisonment imposed, U.S. District Court Judge Robert E. Blackburn ordered Whittington to serve one year of supervised release. Whittington paid approximately $1.8 million in restitution to the Internal Revenue Service as a condition of his plea agreement. 

Principal Deputy Assistant Attorney General Zuckerman commended special agents of IRS–Criminal Investigation, who conducted the investigation, and Tax Division Trial Attorneys Kathleen M. Barry, Lori A. Hendrickson, and Sarah A. Kiewlicz, who prosecuted the case.

Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.

Financial Fraud
Press Release Number: 
Updated October 9, 2018