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Press Release

Former Real Estate Developer and his Long-Time Girlfriend Sentenced to Prison for Tax Evasion Scheme

For Immediate Release
U.S. Attorney's Office, Western District of Washington
Pair Failed To Report More Than $23 Million In Income

A former western Washington real estate developer and his long-time girlfriend were sentenced today in U.S. District Court in Seattle for 25 counts of tax evasion and false statements related to their scheme to avoid paying taxes on more than $23 million in income, announced U.S. Attorney Jenny A. Durkan.  WINSTON BONTRAGER, 64, was sentenced to 11 years in prison and three years of supervised release.  His long-time girlfriend, PAULINE ANDERSON, 65, was sentenced to 39 months in prison.  As an Australian citizen, she likely will be deported following her prison term.  Both will share a restitution obligation of $2,717,510.  The couple was indicted in March 2012, and both have been in federal custody since June 2012.  They were convicted following a four week jury trial in July 2013.  At sentencing U.S. District Judge Richard A. Jones said to BONTRAGER, “You were a one man wrecking ball in the lives of many people...  You believed you had immunity from restitution and tax obligations...  You lived the lifestyle of the rich and famous while lying and cheating to avoid tax obligations.”

“This is Mr. Bontrager’s third conviction and sentencing hearing before a federal judge in Western Washington,” said U.S. Attorney Jenny A. Durkan.  “Despite having more than enough money to pay his taxes and his debt to society, this defendant brazenly thumbed his nose at every governmental agency and institution that he came into contact with, by lying, cheating and deceiving them, for one sole purpose: greed.”

BONTRAGER was previously convicted in 1983 for bank fraud and in 1994 for defrauding the Oregon Public Employees Retirement System and the IRS of over $687,000.  In 1994 he was sentenced to 40 months in prison.  BONTRAGER made numerous false statements surrounding his failure to pay more than $687,000 in restitution from his prior conviction.  During the trial prosecutors detailed how BONTRAGER and ANDERSON filed false tax returns from 2004-2009, failing to report more than $23 million in income and failing to pay more than $2.7 million in taxes.  Over $10 million was moved into foreign bank accounts in PAULINE ANDERSON’s name, and virtually all of the couples’ assets were put in ANDERSON’s name in order to hide it from the IRS and those seeking to enforce BONTRAGER’s restitution obligation and collect delinquent taxes.  At the same time that the couple paid little in income taxes, they purchased a luxury condominium in Bellevue and spent approximately $500,000 on an extensive remodel.  They owned a $325,000 wine collection, a $1.2 million home in Southern California, a 6.7 carat diamond ring, a Bentley worth $186,000, and they spent over $3.4 million in credit card purchases, including travel, cosmetic surgery, cosmetic dentistry, restaurants, and clothing and shoes.
At trial prosecutors described various development deals in Vancouver, Washington where BONTRAGER made millions of dollars, in some instances defrauding business partners as well as the IRS.

“Mr. Bontrager refused to pay court-ordered restitution to his victims from a previous fraud conviction.  Mr. Bontrager clearly failed to learn his lesson and continued to commit fraud.  In his latest scheme, he defrauded his new business partners and the American taxpayers.  He also enlisted the help of Ms. Anderson to conceal his fraud and ill-gotten gains,” said Kenneth Hines, Special Agent in Charge of IRS Criminal Investigation in Seattle.  “Today's sentences show that greed is a powerful emotion that cloud judgment and motivate people to abuse the trust of others.”

BONTRAGER was convicted of nine tax counts and eight counts of making false statements.  ANDERSON was convicted of 11 tax counts.

The case was investigated by the Internal Revenue Service Criminal Investigation.  The case was prosecuted by Assistant United States Attorney Carl Blackstone.

Updated March 23, 2015