Convicted in 2009, treatment center operators will serve a total of 50 months

A judge sentenced a Sedona couple convicted of tax evasion Thursday, Feb. 17, according to the District of Arizona U.S. Attorney’s Office.

U.S. District Judge Mary H. Murguia sentenced Dr. William Howard Steiniger, to 42 months of imprisonment. His wife, Diane Goulder Steiniger, was sentenced to eight months imprisonment followed by six months of home confinement.

“The Steinigers went to extreme measures to disguise their fraud but were ultimately caught,” Dennis K. Burke, U.S. attorney for the District of Arizona, stated in a press release. “Along with our partners at the IRS, our office will continue to vigorously pursue anyone who attempts to defraud the U.S. government through income tax evasion.”

The Steinigers operated the Desert Canyon Treatment Center, a substance abuse treatment facility in Sedona, from 1998 to December 2008. A grand jury returned a nine-count indictment against them in January 2009.

The investigation was conducted by special agents of the Internal Revenue Service Criminal Investigation Division.

The two defendants were convicted at trial in Dec. 11, 2009, of four counts of tax evasion and one count of conspiracy to impede and impair the IRS.

They were subsequently held under house arrest and electronic monitoring.

A Prescott judge was scheduled to sentence the Steinigers on March 22, but sentencing was delayed until June 28, then again Sept. 22.

They filed a motion for a new trial in early September.

According to U.S. Attorneys Frank T. Galati and James R. Knapp, the Steinigers evaded taxes by establishing business entities they created and “conspired to defraud the United States and to defeat the IRS in its attempts to assess and collect income tax,” William Steiniger funneled income from Desert Canyon into a sham trust named National Career & Life Institute, according to prosecutors.

Diane Steiniger transferred her profits to Flair International, Ltd., which she set up in Belize as an international business corporation, or shell company, prosecutors stated.

The Steinigers signed numerous checks on two Desert Canyon bank accounts made payable to NCLI. Diane Steiniger also wrote checks on Desert Canyon’s J.P. Morgan Chase and Bank of America accounts, made payable to Flair International.

According to testimony at the trial, the Steinigers evaded assessment and payment of more than $390,000. Neither paid any federal income tax from at least 1997 through 2005.

While Diane Steiniger filed in 2002 and 2003, on her 1040 tax form, she claimed zero dollars.

The conspiracy charge for which the couple was also convicted stemmed from the indictment’s allegation that in 2007 the couple prevented, “a partner or co-owner of Desert Canyon from complying with a federal grand jury subpoena,” which ordered him to produce Desert Canyon’s bank records.

Prosecutors considered the Steinigers a flight risk due to their wealth, frequent trips to Georgia, a “for sale” sign on their $904,000 Sedona home, ownership of two Porshes and an Infiniti, desire to relocate to Belize, and the fact that William Steiniger owned and piloted a private plane.

“Today, justice is served, and these two individuals are being held accountable for their criminal actions. The creation of various entities was nothing more than a sham to disguise their intent to evade the payment of taxes,” stated Dawn Mertz, special agent in charge of the Phoenix Field Office, IRS Criminal Investigation.

“The sentence imposed by the judge should send a strong message to those who believe our tax system is unconstitutional,” Mertz stated.

William Steiniger was taken into custody Feb. 17, according to Jenna Ramey, public affairs contractor with the U.S. Attorney’s Office. Diane Steiniger is scheduled to surrender to authorities in six weeks because she has a medical condition and is likely to be incarcerated in a bureau of prisons medical facility.