Wisconsin woman and Appleton Resident Diane Baugh Convicted of Tax Evasion for Failing to Report Income Received from Internet Sales of Stolen Scrapbooking Merchandise
United States Attorney James L. Santelle announced today that on February 13, 2012, Diane L. Baugh (age: 56) of Appleton, Wisconsin, was convicted of three counts of tax evasion based on her failure to report over $300,000 she received by selling stolen scrapbooking merchandise using eBay and direct email. Baugh will be sentenced by United States District Judge William Griesbach in Green Bay on May 21, 2012. She faces a maximum of 15 years in prison and $300,000 in fines.
The investigation determined that between January 2005 and April 2010, Baugh received over $605,000 by selling scrapbooking merchandise, and that she willfully failed to report any of that income to the Internal Revenue Service.
Baugh received the scrapbooking merchandise from Virginia M. Akers (age: 67) of Indiana who had shoplifted it from Hobby Lobby department stores in several states and shipped it to Baugh in Appleton. Baugh advertised the merchandise on eBay and also used direct email marketing with foreign and domestic customers that she had cultivated on eBay over the years. Baugh’s on-line customers paid her for the merchandise and shipping costs using PayPal. Baugh then used PayPal and money wire services to pay Akers for her share.
From the gross receipts of over $605,000, Baugh paid Akers over $257,000. After paying over $46,000 in shipping costs, Baugh’s net income was approximately $301,561.
On January 23, 2012, Virginia Akers was sentenced to 60 months in federal prison for conspiracy to commit mail and wire fraud relative to the stolen scrapbooking merchandise. The court also ordered Akers to pay over $2.2 million in restitution to Hobby Lobby based on Baugh selling the stolen merchandise at approximately 25% of its retail value.
The case was investigated by the United States Postal Inspection Service, the Appleton Police Department, the Champaign (Illinois) Police Department, the Internal Revenue Service, Hobby Lobby’s Loss Prevention Department, and other state and local law enforcement agencies. The case was prosecuted by Assistant United States Attorney Timothy W. Funnell of the United States Attorney’s Office of the Eastern District of Wisconsin, Green Bay Division.
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