Ben Thomas’ home sat at an intersection in Hildale. That meant, Thomas said he was told, that he and his wife could file two sets of tax returns.
One set of returns could be filed from an address on the east-west street and another from the north-south street.
“That sounded like a scheme I did not want any part of,” Thomas said in a recent interview.
Yet, according to court records, the three brothers behind the pitch to Thomas sought $2.6 million in fraudulent tax refunds for themselves and others over four years. Alma T., Denver T., and Trenton T. Barlow were each charged in April in federal court with one count of conspiracy and two counts of making false claims to the government. They have pleaded not guilty.
Much of the money the brothers received likely went to the polygamous church the defendants belonged to, says a half-brother, Ted Barlow. Hildale and adjacent Colorado City, Ariz., are home to the Fundamentalist Church of Jesus Christ of Latter-Day Saints whose president, Warren Jeffs, requires members to provide any surplus money to the bishop.
“Alma basically told me one time, ‘We’re told to get money for the church no matter what,’ ” Ted Barlow recalled during a recent interview.
Ted Barlow said the three defendants have the same parents, while he has a different mother. The defendants were close, Ted Barlow said, and had a background in construction and manufacturing — not accounting or tax preparation. Neither Utah nor Arizona list the defendants as being certified public accountants.
The grand jury indictment describes a simple scheme. When filing their own tax returns, the defendants falsified W-2s to show they had far more tax withholdings than they actually paid.
In one example from the 2011 tax year, Alma T. Barlow told the IRS, according to the indictment, that $628,100 had been withheld from his paychecks. He asked for a refund of $429,003.
Alma and Denver Barlow co-owned a clothing manufacturer in Hildale called Most Wanted Jeans. Prosecutors allege Denver Barlow falsified business expenses to receive a tax refund of $45,168 for 2012.
The indictment also alleges the defendants sought out people in Hildale and Colorado City and asked to file their taxes for them. Working from Most Wanted Jeans in a business park with other FLDS affiliated-businesses, the defendants, according to court documents, misreported the filers’ incomes, marital status and number of dependents in order to make the filers qualify for the Earned Income Tax Credit, which can reduce the taxes that low- or moderate-income people pay.
The defendants took 10 percent of the refunds received by the other filers, the indictment says.
The indictment says that the defendants applied for the $2.6 million in tax refunds for themselves and others, but it doesn’t specify whether the IRS actually paid all that money. The indictment makes no mention of the FLDS or what the defendants did with the proceeds.
The case is being prosecuted by a U.S. Department of Justice attorney in Washington, D.C., and no one from that office returned a request for comment.
A grand jury in Salt Lake City issued the indictments on April 5, but the case was sealed until Sept. 15, apparently so law enforcement could find the Barlows without tipping them off to the indictment.
The Missouri State Highway Patrol arrested Alma Barlow, 35, and Denver Barlow, 34, on Aug. 29 in Monett, Mo. It is unclear from public records whether Trenton Barlow, 26, was ever arrested, but all three brothers showed up on Sept. 15 at U.S. District Court in Salt Lake City, according to a court docket.
There, Judge Ted Stewart granted them a release pending trial, which is scheduled for April 16.
Randy Ludlow, an attorney appointed to represent Denver Barlow, said the brothers were members of the FLDS, though they have since left the church. The defendants are complying with the terms of their pre-trial release, he said.
“They have been making contact with their probation officers and also their attorneys,” Ludlow said.
Even after the indictment was unsealed, federal prosecutors did not promote the arrests the way it did in February 2016 when 11 FLDS members were indicted. In that case, the members were accused of defrauding what is commonly called the food stamp program by turning over debit cards and purchased groceries to people who weren’t qualified for the program. Prosecutors initially claimed that fraud totaled $12 million.
Former FLDS members later criticized federal prosecutors for how eight of the cases ended in no jail time, probation or restitution requirements for the defendants. The purported ringleader of the scheme, Lyle Jeffs, pleaded guilty Sept. 20 to one count of fraud and one count of failure to appear in court. He faces up to five years in prison when he is sentenced by Stewart on Dec. 13.
Lyle Jeffs is a full brother of Warren Jeffs, who is serving a prison sentence in Texas of life plus 20 years for sexually abusing two girls he married as plural wives.
Ted Barlow said the tax fraud defendants are good men who were trying to please church leaders.
“You’ve got to realize these boys are sucked into this Warren program so deep, they don’t know where they are,” he said.