A Virginia woman with a gambling problem pleaded guilty Monday to three felony tax crimes and three more felonies for writing bad checks in a separate case.
Debbie Kolterman, 50, pleaded guilty to failure to file an individual income tax return in 2005, failure to file a withholding tax return in 2008 and failure to file a sales tax return in 2007.
She also pleaded guilty to three counts of issuing dishonored checks to three victims.
Kolterman allegedly owed the state more than $44,000 in taxes, penalty and interest. She entered the pleas before Judge Gary Pagliaccetti in St. Louis County District Court in Virginia.
Under the terms of her plea agreement, within six months of her sentencing on July 19, Kolterman must pay full restitution to the victims of her bad checks.
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Eveleth defense attorney Bruce Williams asked Kolterman during the plea hearing where all of the money went. She said it went to gambling.
"Ms. Kolterman fully understands that she took advantage of many people and is truly remorseful for her actions," Williams said during a phone interview. "Unfortunately, this seems to be a common pattern when people have gambling issues. She is going through treatment for her gambling compulsion."
The investigation into Kolterman's tax history began after an anonymous woman called the Minnesota Department of Revenue's tip line. The woman alleged that Kolterman didn't pay sales or withholding tax from her business, the Kozy Kafe in Virginia, which Kolterman no longer operates. Last year, citizen tips resulted in 88 percent of the Depart-ment of Revenue's criminal cases.
According to the criminal complaint, Kolterman was not filing quarterly sales tax returns for her business, Kozy Kafe North in Virginia. Employees sometimes were told to pay themselves out of the till, and withholding funds that were collected were never remitted to the Revenue Department. Kolterman is accused of failing to file income tax returns between 2005 and 2008.
In the alleged bad check case, a woman told Virginia police that she had loaned Kolterman $10,000 and her mother loaned her $7,500. A third woman told police she loaned Kolterman $3,600. The checks Kolterman wrote to pay back the loans were returned for not having sufficient funds in her account.
