• Leslie Williams
  • Faith-Ingle-Smith 3
  • Faith-Ingle-Smith 2
  • Faith-Ingle-Smith 1
  • Sheriff's tipline
Sat, Oct 25, 2014 01:33 PM
Issue of October 22, 2014
Email Link

Puppy dealers charged with tax evasion

June 24, 2009 | 08:29 AM

Felony charges of tax evasion were filed in Marion County Criminal Superior Court 24 Monday against two Harrison County dog breeders who are accused of selling hundreds of dogs and puppies without collecting sales tax.

Virginia Garwood, 63, and her daughter, Kristen Garwood, 26, both of Mauckport, were each charged with four counts of Class D felony evasion of income tax and two counts of Class D felony failure to remit or collect sales tax. They also were charged with failure to preserve sales-tax records, a Class A misdemeanor, and failure to register as a retail merchant, a Class B misdemeanor.

The charges were filed by the Office of the Indiana Attorney General to prosecute tax evasion on behalf of the Indiana Department of Revenue. The charges were filed in Marion County because state law notes that the Attorney General represents the Indiana Department of Revenue and, accordingly, files charges in the county where the seat of state government is situated, which would be in Indianapolis in Marion County.

"The defendants were making sales to Hoosiers who expected healthy animals. And they were making no attempt to collect sales tax for the State of Indiana. This is a crime and is unfair to taxpaying businesses that do play by the rules," Indiana Attorney General Greg Zoeller said.

The judge set bond at $3,500 surety or $1,500 cash.

The Garwoods already face $284,735.88 in back taxes, penalties, interest, collection fees and court costs, as well as $3,000 in state attorney fees.

A press release distributed by the Attorney General's office said selling diseased animals is also a crime under Indiana statute and that the AG office referred the case to the office of Harrison County Prosecuting Attorney Dennis Byrd.

"No one has contacted us in any way, shape or form before, during or after the seizure," Byrd said. "We've not heard anything from the state."

The probable-cause affidavit alleges the two women sold puppies and dogs commercially since 2004 but did not report the earnings they received from dog sales as income, and they did not collect or remit sales taxes to the State of Indiana. They published advertisements in this newspaper as well as The Courier-Journal in Louisville numerous times offering puppies for sale. Moreover, Virginia Garwood illegally declared her adult daughter as a dependent on her tax returns, the affidavit alleges.

Based on a complaint about possible sales-tax evasion at the Garwoods' dog-breeding operation, investigators from the Attorney General's office, Indiana State Police and Department of Revenue served a search warrant June 2 on Virginia Garwood's Breezy Valley Dairy Farm in the 8600 block of Valley City-Mauckport Road near Mauckport. To satisfy a tax-jeopardy assessment of more than $132,440 in unpaid sales and income taxes, the investigators seized the inventory of the business — 240 dogs and puppies that had been confined in squalid cages — as well as tax records. One dog on the property was found dead. Because of the large number of dogs, volunteers from the Humane Society of the United States assisted in removing the canines to an emergency shelter in New Albany. Two of the puppies seized June 2 later tested positive for giardia, a highly contagious gastrointestinal parasite that can be transmitted to dogs and people. After receiving veterinary care, the remaining dogs were transferred to 10 animal shelters throughout the state and made eligible for adoption.

Zoeller noted a new law the Indiana General Assembly passed that takes effect July 1, House Enrolled Act 1468, authorizes the Attorney General's office to file civil actions against commercial dog-breeding businesses that fail to register with the state.

The charges against the Garwoods were filed under existing law, however.

"It doesn't matter whether a retail merchant is selling puppies or plasma TVs or tennis rackets; if they are not collecting and remitting sales tax, it's a crime," Zoeller said. "By the time tax evaders are misleading consumers and selling diseased animals that can endanger the public, their actions no longer can be considered legitimate commerce."

If convicted, the Garwoods would face six months to three years in prison on each Class D felony, up to one year on a Class A misdemeanor and up to six months on a Class B misdemeanor, though sentences could be served concurrently.

A temporary injunction accepted by the Garwoods and the state earlier this month in Harrison Circuit Court prohibits the defendants from doing business in Indiana until their tax liabilities are paid. According to court documents, the Garwoods are prohibited from "selling, procuring, trading, breeding, swapping, or otherwise transferring dogs, puppies, or canines in Indiana or across state lines."

The injunction also says the women are to immediately register with the Indiana Department of Revenue for an Indiana Registered Retail Merchants Certificate for all business they do not involving the sale of dogs (the Garwoods also sell farm animals).

  1. print email
    June 24, 2009 | 09:26 AM

    About time indiana did something about their puppymills ... At least the garwoods had sun screens over their dog pens ...

    Debby, a Kentucky dog lover
  2. print email
    This smells.
    June 25, 2009 | 09:57 AM

    By seizing the dogs the state now has to pay for their care, the owners have no way to sell them to pay the 'sales tax' bill and who is losing here except the rest of us taxpayers? Were the owners given a chance to correct the tax problem before their property was seized? If this was a cruelty case then that is different, but that was not the reason given for the search warrant and seizure. Is this the way this state treats other kinds of businesses who have screwed up on their sales taxes? What is the HSUS getting out of this deal? ... Something stinks here and it isn't the dog poop.

    Kay, a tax payer
  3. print email
    June 25, 2009 | 11:36 AM

    Seems to me the Garwoods are just as good as our U.S. Attorney General and should be given equal consideration and be forgiven their debt as he was! As for the health of the puppies, the one the lady was holding in the picture in the paper appeared to be healthy enough. As for the HSUS and PETA people, I know they are not out of their goard because they haven't got a goard to be out of!

  4. print email
    HSUS at it again, taking away property rights.
    June 25, 2009 | 01:48 PM

    The state gets more expense, the women are denied their rights and the dogs bring in money for the other rescue centers and HSUS gets to spread more propaganda. What happend to freedom and individual rights in America. The terrorists are winning and like in Nazi Germany we sit on our hands and do nothing. We may not like how she has to make a living and as for two dogs having Giardia 1 our 4 residents in Illinois have Giardia at any one time. Its a common illness and many people carrying it without symptoms. She was not charged with abuse and they take away her property without due process. Individuals have the right to feed themselves and they take away the rights of this women. They don't even know how many dogs she has sold so they make up numbers to collect more money that she doesn't have. This raid will cost the state millions.

    another tax payer
  5. print email
    must be nice to steal
    June 25, 2009 | 02:07 PM

    Isnt it great we live somewhere, they can come in and take all your property and GIVE it away ...
    Could you imagine going into a store like walmart confiscating all their goods and then giving it to kmart!! and not selling it and using the money earned to pay the tax bill. It doesnt matter if these people were good or bad dog breeders. They have been shafted and the tax payers of IN have been shafted and the rest of the US citizens better hold onto their animals and property ...

  6. print email
    Whose idea was this?
    June 25, 2009 | 02:35 PM

    Were these people given any warnings in advance and an opportunity to correct the problem? How did HSUS manage to insert itself in this ...? This is still the United States of America where people are presumed innocent till proven guilty isn't it? How is it that the animals were taken before this was allowed to go to court? Do all instances of failure to collect sales tax result in seizure of all business assets with no prior warning? Were these individuals unfairly targeted because they are dog breeders and HSUS wants to eliminate all dog breeding? I'm with Kay, something smells really bad. Watch this closely fellow Americans. It is our government and government officials at work.

    maggie b
  7. print email
    June 25, 2009 | 02:55 PM

    Why should the state reward them for their crime by letting them continue the business ... Let them figure out how to pay the fines after they do some time ... Really look at the facts and circumstances. I would rather my tax dollars help support the pups until they can be placed in forever homes than support a welfare system that imposes little accountability ...

  8. print email
    Answer to Kay, from Kay the taxpayer
    June 26, 2009 | 12:40 AM

    I'd like to see some accountability by those that ... seized property. They have not been found guilty of anything yet. Since when does the state have the right to seize and give away property without a proper trial? Remember "innocent until proven guilty"? ... What has happened to the right to a fair trial and due process. I STILL want to know if they were given any kind of chance to pay or account for the sales taxes as any other business would have been allowed. As for the dogs, I didn't see any abused animals coming out of this place. For all their talk of filthy dogs and abuse by HSUS I only saw dogs with wagging tails, fat and amazingly clean for the 'filthy' conditions being described. Get real. ...

    Kay, the taxpayer
  9. print email
    No question to it, a crime is a crime
    June 26, 2009 | 09:06 AM

    In my opinion a crime was committed. Taxes were not paid ... We must pay for what we do wrong. They had time to pay their taxes just like we do every year ...

    animal lover
  10. print email
    June 26, 2009 | 09:50 AM

    How quick we are to defend the guilty and forget the innocent. The dairy is a livlihood. Selling dogs is a way to generate unreportable income. Wake up! I agree our U.S. Attorney General should not have been relieved of his tax debt but at some point we need stop the madness. I hope our court system stands strong on this one and makes a much needed point.

  11. print email
    What is 'Right'?
    June 26, 2009 | 01:19 PM

    In the U.S., government at any level seeks to make reasons for its own existence and it seems to me that the common thread found in all cases of illegal seizure seems to follow a series of steps: First someone feels slighted, next if the someone isn't a government official, it is someone who approaches a government official in the name of 'justice' in form of a complaint ... Third, the government officials, in fear of offending organizations with seemingly unlimited resources ... seem to take the "I'll scratch your back if" approach, namely by passing laws which are uncalled for such as BSL. Then, the media gets involved and every branch of the media from printed material to TV seeks to improve its own financial standing by inciting emotional responses from its readers, listeners or watchers who all tend to find all sensational stories to be 'Truth' even though the facts of the story are either false or grossly exaggerated.
    There were several points left out of this subject story which may be just that, a story, along the lines of fables & fairy tales! ... Fellow Americans, please wake up to what is happening to the rights of each of us in our country. Historically, dictators and evil have started out to 'improve' things for citizens and they do this while polarizing one group of citizens against another. Look at history for yourself and check out these leaders from times of the early Romans and Greeks to the Norsemen to those commiting atrocities in the world in this day! In years to come, we will surely find outselves in the same situation as these women with the government and another so called 'rights' agency taking everything they have worked for and owned! We have the proof found in Breed Specific Legislation where it has been proven that the breed of dog involved is frequently misrepresented in reporting.
    BSL is being fought all across this country, and if that isn't enough, there is action being promoted in state governments today that will make it impossible to have any animal as a pet, starting with dogs! See Ohio legislation being presented for more info on that, please. By taking away the right of people who should be the governing body of our country instead of just voters who elect a few to serve us but find the few feeling too good and important about their own ideas to vote how constituents would prefer. Many of us will agree that if we are no longer permitted to have our 'pets' then we will lose part of our own soul.
    Carla (OH)

  12. print email
    To Kay the taxpayer
    June 26, 2009 | 01:34 PM

    I think all the proof would be in their tax return that said they reported NO INCOME for a year!!!

  13. print email
    American with Rights
    June 26, 2009 | 11:22 PM

    ... I too would like to know just why these women's animals were taken away. Were there any charges of animal cruelty?
    If we are not going to hold our legislatures accountable for paying their taxes, then I won't agree to holding the common person.
    We better start standing up for the rights of others, or we will be next.

    Priscilla David
  14. print email
    June 28, 2009 | 03:09 AM

    ... Our Constitution says ALL men are created equal. Does that mean anything to you? You want to make an example of these women? I don't think our founding Fathers were endorseing the placement of those type people in high office and punishing the general populase for the same activeity.At least I hope not! The time for standing tall for the rule of law on this subject has come and gone! Presedent has already been set! By Our most esteemed leaders! I am not for people who break any law or fail to maintain their integity in all things. That's a pretty high bar to reach. In critizeing others always remember as one of my teachers of years ago used to tell students when they would comment about somebody, "Sweep your own doorstep first". I am defending all of us and no one in paticular. The people of this country better wake up though it may be to late already.

    Concerned Citizen
  15. print email
    June 30, 2009 | 10:24 AM

    Bone up on your tax law. The IRS has tremendous power when it comes to search and seizure. They could levy or seize all of the defendant's assets if they so choose. It takes the intervention of a lawyer on the defendants part to work any bargains when it comes to seized assets. As far as the dogs are concerned, they were better off being seized and given the opportunity to be placed into family settings. Those dogs were being used as nothing more than breeding machines. They were not beloved family pets but money makers. We may not always like the things that the government does but we really need to step back and look at the whole picture here. Were any of us there to look in each pen and see the living conditions of these animals, no. Some were healthy and maybe many more were not.
    It is easy to spout self righteous rhetoric on this matter and we are all entitled to have opinions. At the end of the day however it is the facts that matter, not opinion.

Riggs Towing
Alberto's Italian Restaurant
Best Built
Barbara Shaw
Schuler Bauer Real Estate
Debby Broughton
Corydon Instant Print
RSS Feed

Corydon Democrat, 301 N. Capitol Ave., Corydon, IN 47112 1-812-738-2211 email