Moses Lake florist faces felony theft charges

MOSES LAKE — After a 17-month investigation, the state Attorney General's Office filed felony theft charges against a co-owner of Moses Lake Floral who allegedly has not forwarded sales tax revenue to the state since 1998.

A state Department of Revenue audit concluded Sally Marlene Walton stole $93,805 in state and local sales tax she collected on about $1.5 million in retail sales from January 2000 through June 30, 2004, according to documents filed in Grant County Superior Court.

Scott Marlow, a Seattle-based assistant attorney general, said his office has no evidence indicating the current owners of Moses Lake Floral ever turned over sales tax revenue to the state since taking over the business in 1998.

Walton, 62, of Moses Lake, is now charged with first-degree theft of sales tax. If convicted, she faces up to 10 years in prison, a $20,000 fine and restitution.

The Attorney General's Office said in charging documents the alleged theft by Walton, who was identified as the business's bookkeeper, grew to become a major economic offense, involving multiple incidents, requiring a high-degree of sophistication and occurring over a lengthy period of time.

Walton declined to comment when reached by phone Wednesday.

Court documents show that Walton told a state auditor in September 2004 that she didn't want to pay taxes on items she had not collected taxes on. She later told the auditor she failed to pay the taxes because of payroll and cash flow problems.

Marlow said Walton's husband and business co-owner, Bill Walton, 62, didn't appear to be involved in financial aspects or "day-to-day operations" of Moses Lake Floral. Bill Walton, who has also served as the president of the Moses Lake Business Association for the past year, has not been charged.

"Our business plan just went to hell on us and we couldn't recover from it," Bill Walton said Wednesday.

"As our business was growing, when we took over the shop, our plan to start paying the taxes didn't work," Bill Walton said. "We didn't get up to where we were making enough money to afford the taxes."

He said they retained legal counsel "a while back" and have now been advised not to worry about the theft charges.

"I don't know where they get all these trumped up charges," Bill Walton said. "If they were putting everybody in jail that owed taxes, the jails would be really full."

He said a news release issued earlier this week by the state Department of Revenue regarding the alleged theft was unnecessary.

"They have a list of charges and they're just trying to make a big deal out of it," Bill Walton said. "They're just tooting their own horn."

He did concede some errors had been made.

"It is a big deal, because it is money and it's money we always meant to be able to pay (the state), but the money was never there to pay them," Bill Walton said.

During the state's investigation, the couple's floral shop located at 115 W. Third Ave. suffered thousands of dollars in estimated damage in a Nov. 23, 2005 fire. The blaze was mostly confined to a computer and records area within the business.

"Some of the records we would have liked to have had for our investigation were supposedly burned in the fire," Marlow said. "And that fire was ruled an arson."

The Moses Lake Police Department reported the circumstances surrounding the fire were suspicious. They provided few details about the fire at the time because the investigation was ongoing and they were in the process of interviewing people associated with the business.

Shortly after the fire, Bill Walton told the Columbia Basin Herald that arsonists broke through an alley window on the east side of the building with a sledgehammer and dumped gasoline into the shop before igniting the blaze. He said the business's computers and records were directly inside the shattered window and were burned. The only surveillance camera inside the shop was also damaged.

The court records released Wednesday morning state that Moses Lake Police Detective Juan Loera found a number of computers and computer backup tapes had been burned in the fire. He also reportedly found unburned gasoline near the burned area.

On Nov. 30, 2005, after authorities entered the shop, they spotted additional computers, according to an affidavit for search warrant. Loera, a state auditor and an investigator with the Attorney General's Office briefly surveyed the damaged shop that day.

"(The state auditor) said that he observed the same computers in Walton's office and in the adjacent office, both undamaged by the fire, that he had seen there during his audit visits in September 2004," the document states. "(The state auditor) concluded that those computers were being utilized by Walton to conduct business."

Authorities executed a search warrant on Tuesday at the floral shop, Marlow said, but the building was empty. However, some additional business records were obtained from a second location with the cooperation of Bill Walton, he added.

Moses Lake Finance Director Ron Cone said Wednesday the city has never received sales tax from the current owners of Moses Lake Floral, and said the city asked the state Department of Revenue to investigate in May 2004.

Some businesses have problems reporting sales tax, he said, when retailers make a mistake or something inadvertent happens with their reporting.

"(Moses Lake Floral) is the only one we've seen of this caliber," Cone said.

Of the nearly $94,000 in sales tax receipts, the city is owed approximately $12,000, he said.

Moses Lake Floral's business license expired Dec. 31.

The Grant County Treasurer's Office said property taxes are delinquent since 2003 for a total of $7,785.33. The owners face a potential foreclosure if those taxes are not paid before May 31, the treasurer's office said.

Moses Lake Police Sgt. David Sands said Wednesday their arson investigation is ongoing. They began the investigation in late November.