A Morgan County couple who was seemingly living large on money from their multi-state drug trafficking operation pleaded guilty Wednesday in federal court to a single count of filing a false federal income tax return.
Hank and Marsha Holloway, of Chesterhill, each face three years in federal prison and a $250,000 fine on the charge, said Internal Revenue Service Criminal Investigator Public Information Officer Craig Casserly.
The Holloways reported a combined income of $12,058 in 2006 and an income of $15,418 in both 2008 and 2009. However, through the sale of drugs, the couple earned approximately $99,491, $115,786, and $148,552 in those years. The IRS has calculated the tax loss as a result of these three years of violations to be $77,068.12, said Casserly.
"The essence of the case is the profit (they were not reporting) was made from the distribution of marijuana," he said.
The Holloways were arrested by detectives from the multi-county Major Crimes Task Force in April 2011 after a three-year investigation into their drug trafficking operation, which stretched from Arizona to their home in Chesterhill.
Hank, 58, is currently serving a five-year prison sentence after pleading guilty last year to five counts of state income tax fraud and one count of engaging in a pattern of corrupt activity, a first-degree felony. Any sentence on the federal charge would begin after his scheduled release from prison-currently set for March 25, 2017.
Timeline of events
April 23, 2011 - A three-year drug trafficking investigation results in the arrest of Hank and Marsha Holloway, of Morgan County, and four others. The task force also seized more than $1 million in cash and assets believed to be the proceeds of a drug trafficking operation that stretched from Arizona to Chesterhill.
April 26, 2011 - With the help of a bondsman, Hank and Marsha Holloway post $275,000 in bond.
Feb. 15, 2012 - Hank and Marsha Holloway each plead guilty in Morgan County Common Pleas Court to one count of engaging in a pattern of corrupt activity and five counts of filing a false state income tax return.
March 2012-Hank is sentenced to five years in prison on the charges and Marsha is sentenced to five years of community control.
September 2012-The Major Crimes Task Force auctions off dozens of vehicles, guns, and other high price tag items forfeiting by the Holloways. Cash and assets forfeited as a result of the crime top $1.3 million in value.
April 2-Hank and Marsha Holloway are indicted by a federal grand jury on three counts each of filing false income tax returns.
Wednesday-Hank and Marsha Holloway each plead guilty in federal court to one count each of filing false income tax returns and face three years in prison and a $250,000 fine.
Source: Times research.
Marsha, 45, was sentenced to five years of community control on the same counts as her husband.
When they were arrested, detectives seized more than 180 pounds of marijuana.
In addition to $957,000 in cash, the Holloways also forfeited 10 vehicles, two jet skis, a camper, a residence, new TVs, pool tables, hot tubs and guns. After auctioning off many of the forfeited items in September 2012, investigators had seized $1.3 million in cash and assets from the Holloways, which will be divided among investigation agencies.
None of that money will go to the federal government, but the Holloways will be ordered to pay restitution as part of the plea agreement, said Casserly.
"At sentencing the judge will determine the restitution amount. Usually the tax loss mirrors the restitution," he said.
Sentencing has been tentatively set for sometime next month, he added.