Skagway assembly member signs guilty plea to federal tax charges, owes IRS $600,000

The Skagway Fish Co. in July 2012. (Creative Commons photo by Jimmy Emerson, DVM)
The Skagway Fish Co. in July 2012. (Creative Commons photo by Jimmy Emerson, DVM)

Longtime Skagway Assembly member and business owner Dan Henry signed a plea agreement Wednesday admitting guilt to federal tax charges and agreeing to pay $600,000 in restitution to the IRS.

Henry is charged with four misdemeanor counts of willful failure to file income tax returns. Henry agreed to pay restitution and serve up to two years in federal prison. More money in fines and fees could be added.

According to federal court documents, Henry failed to file his income taxes from 2004 to 2012. In addition, Henry’s plea agreement states that he engaged in conduct intended, at least in part, to conceal or mislead the IRS of his income, and failed to disclose his income in required reports to the Alaska Public Offices Commission.

Between March 2011 and March 2013, Henry indicated on financial reports to the Alaska Public Offices Commission that he had no income over $1,000 from self-employment. The documents also stated that from 2009 to 2012, Henry’s restaurant, the Skagway Fish Co., earned between $529,000 and $665,000 each year.

Also, from December 2008 to November 2012, nearly $170,000 was deposited in smaller increments via cash deposits or cashier’s checks.

“The defendant had knowledge of the currency transaction reporting requirements, however, he, or others directed by him, conducted deposits and/or the purchase of bank checks … for the purpose of evading the reporting requirement,” the plea states.

According to borough clerk Emily Deach, Henry has served on the Skagway Borough Assembly since he was first elected in 1998. He currently chairs the borough’s finance committee.

Reached by phone on Friday, Henry declined to comment and referred questions to his lawyer. His defense attorney, Robert Bundy, said Henry will submit his guilty plea in court next week in Juneau, with sentencing to follow “much later.” In the plea agreement, Henry agreed to serve anywhere from eight months to two years in prison, but it will ultimately be up to the judge, who could impose up to four years – one year for each count.

“I guess the bottom line is, is that the only thing that he’s charged with and that we’re pleading to is that failure to timely file federal income tax returns,” said Bundy. “There are no allegations that he did not fully file and pay all state and other federal income taxes, all of his employee taxes. All of his other obligations are current and up to date and always have been. This is the only thing.”

Assistant U.S. Attorney Jack Schmidt said because the case has not yet gone to court, he couldn’t comment.

Messages left for Skagway Mayor Mark Schaefer, and Assembly members Steve Burnham Jr., Jay Burnham, Spencer Morgan, Tim Cochran and Angela Grieser were not returned by deadline.

The charges were not brought up at Thursday’s assembly meeting, in which Henry took part. Borough clerk Deach said in an email the charges have not been discussed by borough staff or officials.

Skagway municipal code states that the assembly will unseat a member for a felony conviction, violating the oath of office, or a misdemeanor conviction that includes corrupt practice. Two-thirds of the assembly has to agree on that last one to expel a member. It’s unclear if the rules outlined in the code would apply to Henry.

The director of the Alaska Public Offices Commission did not return a call by deadline, but toldKTUU on Thursday that he was unaware of the charges, and there was no current investigation into Henry’s financial disclosure statements.

Henry’s next court appearance is Tuesday in Juneau.