Published: September 19, 2006 08:43 am      

IRS: Tipton, Williams owe $81,411 in taxes

LEXINGTON — Whether the funds came from bingo or boyfriends, the bottom line for the Internal Revenue Service is that sisters Rita Tipton and Gloria Williams of Waco taxes on more than $344,942.

That’s $81,411 in taxes to be exact, according to testimony Monday from IRS Investigator Trent Tyson. Tipton and Williams, who are on trial for tax evasion and bingo fraud, allegedly unreported their income from 1999-2001. Individually, the United States hopes to hold Tipton responsible for $159,713.70 of unreported income, on which she owes $32,546 in taxes to the IRS. Williams allegedly owes $48,865 on $185,228 she didn’t report to the IRS on her tax returns.

The United States rested its case Monday with the completion of Tyson’s testimony, which included his expenditure method. The formula was used as an indirect method of proof to establish the suspected unreported income as well as the taxes owed during the years in question.

“It has to be explained where the money came from,” Tyson told the jury.

The IRS and Kentucky Office of Charitable Gaming allege the funds came from skimmed bingo proceeds and the sale of illegal pull tab games at Jackpot Charity Bingo in Waco. However, witnesses for the defense claimed otherwise. Former bingo player and volunteer Pat Hensley said for at least 14 years, she helped at the bingo hall and volunteered for the Madison County Ruritan Club, Waco Volunteer Fire Department and the Waco VFD Ladies’ Auxiliary.

“Whatever organization happened to be there, I helped out with whatever nights they needed help,” Hensley said.

Yet in all her time at the bingo hall, Hensley said she was never aware of money being pocketed or the sale of un-serialized pull tabs. If Tipton had additional income, Hensley said she thought it would have come from Tipton’s former boyfriend, Arnold Croucher.

Hensley said at the bingo hall there was a bulletin board where information was posted from pull tab games for winners to see their prizes.

“If anything was illegal they wouldn’t post it out there for everybody to see,” she said.

Long-time bingo player Rose Smith agreed.

“That ain’t right,” Smith told Assistant U.S. Attorney Ken Taylor in response to allegations of conspiracy by Tipton and Williams.

Smith told defense attorney Michael Dean she had not seen Tipton in the bingo hall since the early 1990s except to clean up at night. Smith said she plays bingo seven nights a week at Jackpot Charity Bingo and would not still be playing there if she suspected anything illegal from either of the sisters.

When Taylor questioned her about a specific night where OCG investigators reported they not only saw Tipton in the hall talking about purchasing pull tabs, but personally purchased pull tab games they later determined to be illegal, Smith said the evidence had to be wrong.

“I don’t know what to say about that, but I don’t believe that,” she said.

Since his time as White Hall Volunteer Fire Chief, James Cox said bingo nights at Jackpot Charity Bingo have been the source of approximately 95 percent of the department’s income. Although he is not at bingo every time his department is running it, Cox said he would have known if there was something illegal taking place.

“Anybody that knows me knows I would have me a cow if it ever did happen,” Cox said.

The department was one of the charities forced to pay a fine to the OCG because of the discovery of illegal pull tabs sold during one of their game nights. Cox initially said he was unaware of the $7,000 fine for disciplinary action, but later said he was under the impression the fine was for something else. Taylor told Cox he had essentially paid the fine for Jackpot Charity Bingo’s mistakes, but Cox said he did not feel like he had been ripped off.

“If it happened, it happened during a time when I wasn’t there,” Cox said. “I keep a pretty good eye on this stuff.”

Testimony for the defense will continue today. Dean said Monday he believed his clients would testify in the trial against them.

Kelly Foreman can be reached at kforeman@richmondregister.com or 624-6694.