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Port Orchard theater owner fined $30,000 for tax evasion

A 49-year-old Port Orchard woman was sentenced Friday in U.S. District Court in Tacoma to three years probation and fined $30,000 for tax evasion, according to a news release.

Cindy Ondracek and her husband Jack will also face civil actions by the Internal Revenue Service for the back taxes.

The couple have owned and operated a three-screen drive-in theater in Port Orchard since 1986. They also owned the Redwood Cinema in Bremerton. In March 2010, Ondracek pleaded guilty to failing to pay income tax on more than $197,000 in revenue from the theaters from 2002 to 2005. Over this period the theaters took in more than $2 million in gross receipts - much of it in cash.

According to court records, the defendant structured the deposits into her bank account so that the cash deposits were under the $10,000 benchmark that generates reports to federal government. As charged in the indictment, her share of the tax liability was $68,000.

According to the plea agreement, the pair provided information to their accountant, and knew that they needed to file and pay income taxes, but it was the wife who attempted to shield the information on income from government regulators by structuring the cash deposits. At one point their bank formally sent them a warning notifying them of the currency reporting rules.

At sentencing, prosecuting attorney David Jennings noted that Ondracek had never filed returns in her name in her entire life. Both Ondraceks had been battling the IRS since 1987. IRS records showed that they stopped filing tax returns in 1987, filed once in 1999, and didn’t file again until after the current criminal investigation began in 2007.

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