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14 Felonies Dismissed in Diaz Case

October 6, 2011

Cynthia Diaz. File photo

BARRE – Coventry Town Clerk Cynthia Diaz will serve no prison time for failure to file tax returns. Diaz entered a plea of guilty to two misdemeanor charges in Washington District Court on Wednesday. The state dismissed eight felony counts of failure to pay or file tax returns greater than $500 and six counts of filing false or fraudulent returns.
Diaz was sentenced to 15 days to six months, all suspended. She was placed on probation, will have to perform 100 hours of community service and file truthfully and correctly tax returns for 2003 through 2009. 
Detective Brian Barber of the Vermont Attorney General’s Office wrote in an affidavit that a 2008 investigation showed that Diaz failed to file state income tax returns between 2003 and 2008. State Tax Investigator Frank Champman calculated that Diaz owed the state income tax payments in excess of $500 for each of those tax years, with the exception of 2005. In 2005, the taxes due were less than $500 and therefore failure to pay that tax and the failure to file a return for that time period were misdemeanors for which the statute of limitations had expired.
On Feb. 11, 2010, Barber went to the Coventry Town Clerk’s Office to speak with Diaz. Diaz explained that she didn’t file because she didn’t think she made enough money after her child support deductions. Barber asked Diaz if she checked the tax guidelines on when one must file or for information on child support deductions, to which Diaz replied she had not. Diaz again stated that, after the child support deductions, she did not think she made enough money per year to file.
Barber, using 2008 as an example, told Diaz that she made a Gross Income of $51,791.90  After deductions, including her child support, she still had a taxable income of around $40,000. Barber said Diaz didn’t answer when he asked her if she thought she didn’t have to file on that amount of money. Instead, Diaz asked Barber where he got his figures. Barber explained the figures were obtained through search warrants of her banking accounts and wire transfers. Diaz asked Barber when she would get a copy of those figures, to which Barber said, upon arraignment.
Diaz told Barber that the wire transfers came from her father-in-law who lives in Panama. She said that her ex-husband is supposed to pay her six thousand dollars a year for each of her two children. However, Diaz said her ex-husband never pays it but her father-in-law sends it. She said her ex-husband also lives in Panama and she is unable to take him to court.  
Diaz said no when Barber asked her if she had to add anything about the failure to file tax returns. Diaz also said she’d like to resolve the issue and that she did not think she made enough to file. 
When contacted on Thursday, Diaz had little to say about the issue. Diaz doesn’t believe the outcome will have an effect on her position as Coventry Town Clerk.
“My personal tax returns are my own business,” said Diaz. “I received refunds for all of those years in question. My term ends in 2013 so I guess the voters will tell me what they feel then.”
Mike Marcotte, Coventry select board chair, said the town had one audit done when Diaz was accused of embezzling money from her former employer, Gray’s Paving and Sealing. However, the results of the audit have not come back yet. Marcotte doesn’t know if the town will be taking any additional actions. 
“We haven’t had a chance to discuss what ramifications there are to her pleading guilty to tax fraud,” said Marcotte. “It’s unfortunate. We need to have a discussion to see where we’re going to go.”
Up until April, Diaz was also the treasurer of the Coventry Village School. In a special vote, Diaz lost that job to Deb Tanguay. The vote took place after an audit of the school’s books reportedly showed numerous deficiencies.
Diaz said some of the deficiencies were caused by the administration, such as turning invoices in late and spending grant money without running it through the books.

 

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