The United States Attorney's Office for the Northern District of California announced that Sandra Lee Ross, was sentenced yesterday for failing to file an information return (Form 8300) with the Internal Revenue Service, in violation of 26 U.S.C. § 7203.  Ms. Ross, 56, a resident of Redway, California, received a sentence of three years probation with the condition that she serve 12 months of community confinement in the Whatcom County, Washington Jail.  The sentence was handed down by the U.S. District Judge Maxine M. Chesney in San Francisco.  The court also imposed a criminal fine of $4,000.

Ms. Ross was indicted by a federal grand jury on November 12, 2002, with one count of Money Laundering in violation of 18 U.S.C. § 1956(a)(3)(A), and twenty-eight counts of Failure to File a Return with the Internal Revenue Service in violation of 26 U.S.C. § 7203.  Ms. Ross pled guilty on May 7, 2003, to the felony charge of intentionally failing to file the required form with the IRS.

In pleading guilty, Ms. Ross admitted that on August 16, 1999, she started a sole proprietorship, Generator-Parts-Service (also known as G.P.S.), located at 1150 Evergreen Road, Suite 7, Redway, California, which she continued to own and operate through January 2, 2002.  Ms. Ross acknowledged that between September 3, 1999, and March 16, 2000, she sold thirty-four electric generators for payments in cash, at over $10,000 for each generator, for a total of nearly $695,000.  As part of her plea, she admitted that she knew or believed that the currency paid to purchase one of the generators was intended to promote an unlawful activity.  Ms. Ross was aware that an IRS Form 8300, Report of Cash Payment Over $10,000 Received in a Trade or Business, was required to be filed with the IRS for each of the thirty-four generators she sold where she received cash over $10,000.  Despite this knowledge, Ms. Ross acknowledged, she willfully did not file the required IRS forms for any of the thirty-four generators.  Ms. Ross admitted that she was the only person ultimately responsible for selling generators at G.P.S.

According to court documents, Ms. Ross dealt with an IRS undercover agent posing as a large-scale marijuana grower.  Over the course of their exchanges, Ms. Ross sold the undercover agent a generator she believed would be used to facilitate the growth of marijuana.  The documents reveal that the agent paid cash in excess of $10,000 and was given false paperwork by Ms. Ross to complete in an effort to hide the transaction from authorities. 

The prosecution is the result of a lengthy investigation by special agents of the IRS Criminal Investigation Division, the Drug Enforcement Administration, the Humboldt County Sheriff's Department, and the Humboldt County Drug Task Force.  Emily Kingston is the Assistant U.S. Attorney who prosecuted the case, with the assistance of Stefania Chin and Kathy Tat.