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Twin City Water Works, the utility accused of being a slush fund for the Fundamentalist Church of Jesus Christ of Latter-Day Saints, has pleaded guilty to evading taxes in Arizona and will pay $390,683 in back taxes and penalties.
The utility, which provides water to the towns of Hildale, Utah, and Colorado City, Ariz., filed the written plea June 10 in at a Phoenix courthouse. Twin City Water pleaded guilty to attempted knowing failure to pay a tax, a felony — albeit Arizona's lowest level.
Twin City Water acknowledged evading taxes between 1996 and 2013. A ledger attached to the plea shows the utility should have paid Arizona $147,624 in taxes in those years. With interest and penalties, the figure increased to $370,683.
The plea specifies Twin City Water is paying that money, plus another $20,000 that will go into the Arizona attorney general's anti-racketeering fund. Law enforcement over the years has contended the FLDS operates as organized crime.
Barry Mitchell, the Phoenix attorney who represented Twin City Water, was unavailable for comment Tuesday.
The case appears to have been quietly filed and adjudicated. A court docket shows both the complaint and the plea were entered June 10.
Ryan Anderson, a spokesman for the Arizona attorney general, said that office has been examining Twin City Water since 2012. He called the repayment and fines a major judgment for the attorney general.
"Once it started to move, it moved quickly," Anderson said of a resolution to the case.
The Arizona attorney general, which prosecuted the case, is the latest entity to pursue Twin City Water, which is incorporated in Utah as a nonprofit entity.
The state of Utah has filed a lawsuit in state court asking Twin City Water be placed into receivership. The United Effort Plan, a trust that owns most of the land in Hildale and Colorado City, has filed a similar lawsuit and accused the utility of pumping wells that don't belong to it.
The U.S. Department of Justice also has examined the finances of Twin City Water. An accountant hired by the Justice Department found Twin City Water diverted $1.7 million to the FLDS Church over a decade, a sum that helped the utility finish with a negative balance in those years.
Some of that money was paid directly to the FLDS Storehouse. Other money went to a company helping build the Yearning For Zion Ranch in Texas and to pay for personal expenses of Twin City Water board members.
Jeff Shields, an attorney representing the United Effort Plan, on Tuesday said the guilty plea bolsters his argument that Twin City Water is mismanaged.
"It's a way for the church down there to rip off the ratepayers in a supposed legal way," Shields said.
Shields and other UEP attorneys have deposed Twin City Water board members and employees, most of whom claimed to know little about the utility's mechanical or financial operations.
One of those deposed, Twin City Water Works President Sylmar Barlow, signed the plea agreement on behalf of the utility. In a deposition last year, Barlow claimed to not know why Twin City Water was tax exempt or where its tax exempt paperwork was stored. He also said he didn't know why checks were written to the storehouse.
Joseph M. Covey, the attorney representing Twin City Water in its Utah litigation, said he was unfamiliar with the Arizona plea and how it would impact his case. He said any money sent to the FLDS Church happened years ago and should not be an excuse to put the utility into receivership.
"Most of the evidence has been, 'Look what happened five and seven years ago,' " Covey said.
Covey said he isn't aware of any Utah agency pursuing back taxes from the utility.