Former head of drainage district sentenced for stealing flood control tax dollars

The former commissioner of a King County drainage district for over 35 years has been sentenced for his involvement in a scheme to steal tax dollars meant for flood control efforts

According to court records and testimony at trial, 70-year-old Allan Thomas and his wife stole over $468,000 of local tax dollars and funneled it into a joint business account called A C Services, which the Thomas' claimed was for drainage ditch maintenance.

As a commissioner, Thomas's job was to estimate the costs of drainage maintenance for the district so that the county auditor could set and assess the appropriate taxes. The commissioners then authorized payment to service providers who had supposedly done maintenance work on the drainage system. 

The scheme started back in 2012. Shortly after the tax dollars were deposited into A C Services’ account, the money was quickly transferred to other accounts belonging to the Thomas's or was used to pay their expenses for such things as hay, mortgage payments, or property taxes, according to U.S. Attorney Nick Brown. More than $68,000 was withdrawn as cash.

According to Brown, in 2018, after the couple became aware of an investigation into their conduct, they began funneling the tax dollars through another company: City Biz. The couple submitted warrants for City Biz to be paid for drainage maintenance work and within days of the funds arriving in City Biz bank accounts, Brown said.

Nearly all the money was transferred directly to Thomas or the the family's dairy farm. The couple's friend who agreed to help with the City Biz fraud, now also has a federal felony conviction for repeatedly lying to the FBI, according to Brown.

The pair worked together to submit false documents by mail and by wire. 

"Mr. Thomas did not do his job in maintaining critical drainage ditches, but he and his wife still fraudulently paid themselves using taxpayer dollars as if he did," said Special Agent in Charge Bret Kressin, IRS Criminal Investigation (IRS-CI), Seattle Field Office. "And when the couple realized they were being investigated, the Thomases attempted to cover up their fraud. They were quite literally digging themselves deeper into a ditch of lies."

Thomas was convicted of conspiracy, four counts of wire fraud and mail fraud and one county of aggravated identity theft. He was sentenced to two and a half years in prison. 

"You were a public officer in a position of trust… People trusted you not to enrich yourself," U.S. District Judge Richard said during sentencing. "These funds were ill-gotten gains, they were not earned…. It was a breach of trust."

His wife, Joann, was sentenced to three years in prison in January for her role in the scheme.

Since the couple defrauded taxpayers of $468,165 over the years, a judge has scheduled a restitution hearing for early April of this year.