The long-awaited fraud case against Enumclaw residents Allan and Joann Thomas has begun.

The couple allegedly stole more than $460,000 in local taxpayer dollars between 2012 and 2019 while Allan Thomas was the commissioner of Drainage District 5, a local special taxing district. Thomas and his wife were charged more than a year ago with fraud, money laundering, identity theft and conspiracy.

The Department of Justice’s case against the couple is set to be waged in the U.S. District Court in Seattle this week, beginning Monday with jury selection — which could take all day or even longer.

The Courier-Herald is printed every Monday and delivered on Wednesdays, so news of the trial will appear in next week’s paper.

After a jury is selected, attorneys on both sides will present opening statements, framing the case and summarizing the evidence and arguments they plan to make. The bulk of the trial will consist of attorneys examining witnesses and evidence. The attorneys will present closing arguments, and after that, it’s in the jury’s hands.

With a complicated set of allegations and two defendants with their own attorneys, the trial could be lengthy. Attorneys on both sides estimate the trial will take at least a week, according to a court brief for Joann Thomas and an interview with DOJ spokesperson Emily Langlie.

For those who are new to this case or need a refresher on how everything went down more than three years ago, here’s a comprehensive timeline of events.

THE INITIAL INVESTIGATION

Allan Thomas was elected as a commissioner to Drainage District 5, a local special taxing district charged with maintaining 18 miles of ditches around Enumclaw to control flooding, in 1988, and served continually for the next three decades.

But the city of Enumclaw took notice of Thomas in October 2017 after numerous attempts to make contact went unanswered and a Public Disclosure Request for bills showing what work was being done on Drainage District 5’s ditches went unanswered for a month.

The requested bills showed that Drainage District 5 (DD5) was paying a company called A. Conservation Services (AC Services) to do ditch work. However, Enumclaw City Attorney Mike Reynolds could not find records of the company being in business, and when he visited the physical address listed on the bills, learned that the building he arrived at was owned by the Thomases.

Suspecting tax dollars were being misused, Reynolds filed a report with the Enumclaw police department, which opened an investigation in November 2017.

Detective Nona Zilbauer took on the case and interviewed Thomas’ son Alexander Thomas, a police report reads. Alex told Zilbauer that his father wanted to start a business for him to clear DD5’s ditches in 2012, and that Alex performed two jobs for the business that year, but no more. In the interview, it was confirmed the business being referred to was AC Services.

Zilbauer’s research showed AC Services went out of business in 2013, and the address where the business was supposedly operating out of did not exist.

However, bank records for AC Services showed that money continued to flow into its checking account at least until 2017 totaling nearly $395,000. A related savings account also received deposits for a total of nearly $27,000. Finally, a third account received more than $49,000 in deposits as well for an altogether total of about $471,000.

Alex denied knowing about the financial activity in the AC Services accounts, and after receiving a signed warrant to look closer at the accounts, Zilbauer discovered more than $156,000 was withdrawn with what appeared to be Joann’s signature on the receipts.

Another public disclosure request, this time to King County (special tax districts in the county have to request taxpayer money be wired to them on a need-be basis, rather than collecting property taxes itself), for work invoices submitted by DD5, revealed that the district paid another business, City Biz, more than $24,000 to do work in October 2018.

Based in Renton, City Biz owner Darrell Winston told Det. Zilbauer he performed work for the district, and had pictures for proof, but couldn’t recall the address where the work was performed.

Zilbauer wasn’t able to interview Thomas, Joann, or DD5’s other commissioner, Kennet Olson, and the case was forwarded to the King County Prosecutor’s Office in January 2019.

Olson has not been charged.

WA AUDITOR INVESTIGATION

While talking to King5 reporter Chris Ingall, who broke this story in April 2019, Thomas claimed that the Washington state Auditor gave DD5 a clean bill of health in 2016.

However, the Auditor’s Director of Communications Kathleen Cooper said that was inaccurate, since the kind of audits they did for the district were “assessment audits”, which are high-level, quick looks into the special tax district’s financials.

“Nothing came to our attention… that caused us to believe the District was not in substantial compliance with applicable laws, regulations, and its own policies, or had significant weaknesses in controls over the safeguarding of pubic resources,” one such audit, completed December 2016, reads.

But Zilbauer’s report, combined with a request from the city of Enumclaw, convinced the Auditor to perform an accountability audit.

That far more detailed audit, published May 2019, confirmed much of Zilbauer’s investigation, and concluded that more than $413,000 in property taxes was misappropriated, in additional to another $66,000 in other “questionable” transactions.

“We… recommend the District seek recovery of the misappropriated $413,323, questionable costs of $66,035, as appropriate and related investigation costs of $24,066 from Commissioner A (Thomas) and his wife,” the report reads. “The results of this investigation are serious.”

The process for potentially recovering those funds will begin if the Thomas’ are convicted, a Department of Justice spokesperson said.

RESIGNATIONS

Months before investigations were made public, King County Council member Reagan Dunn started his own investigation into an alleged lack of proper elections at the drainage district.

According to several letters sent between Dunn, Thomas, and Olson in March and April 2019, the two commissioners failed to provide Dunn, himself a former federal prosecutor, evidence that they were duly elected to their positions.

“The information provided by you… does not establish when either of you filed with the King County Elections Department as a candidate for a Drainage District #5 commissioner position,” Dunn wrote in an April 24 letter. “… The King County Elections Department has reported that there has never been a candidate filing for any Drainage District #5 commissioner position since the statutory framework governing election of drainage district board members went into effect in 1986.”

It appears no such evidence of proper elections was brought to Dunn’s attention, and the council member announced May 13, 2019, that he would be moving to declare the DD5 commissioner seats vacant and appoint new officials.

“Despite my repeated requests for documentation or other evidence to show that the positions on the Drainage District 5 board of commissioners are not currently vacant, I have received nothing substantial from either of you,” Dunn wrote to Thomas and Olson. “I am moving forward with an appointment process to fill them.”

But before the King County Council took action, both Olson and Thomas resigned from their positions on May 14 and 15 respectively.

Enumclaw residents David Ballestrasse, Mark VanWieringen and Alan Predmore were appointed to the DD5 commissioner seats July 2019.

Thomas was elected in 1988, two years after Dunn stated the drainage district election framework was created; it’s unclear how “there has never been a candidate filing” for DD5 when Thomas presumably filed as a candidate to be elected. The Courier-Herald has asked Dunn’s office, as well as the King County Archivist department, for additional documents.

THE FEDS GET INVOLVED

By summertime, Dunn was becoming frustrated that the King County Prosecuting Attorney’s Office had not made a decision whether or not to charge Thomas with a crime, especially since six months had passed since Det. Zilbauer’s report was filed with the department.

“A little over three weeks ago, I asked you about the status of this investigation and the timing of the charges. You indicated that you expected your office to take action within the next two weeks… it’s now more than three weeks later and no charging action has been taken by your office. Would you be kind enough to share your latest thinking on the matter?” Dunn wrote in an email to Prosecutor Dan Satterberg on July 17. “I believe the public requires assurances that there will be prosecution action taken, in what appears to be a significant public corruption matter.”

Satterberg replied with an email a day later.

“The [U.S. Attorney’s Office] wants to file this case. We are coordinating with them,” he responded. “[U.S. Attorney] Brian Moran is aware of it and knows we want to move quickly, but Federal prosecutors work at their own pace.”

Dunn didn’t have to wait much longer — the FBI raided Thomas’ home in the early hours of July 19; witnesses said law enforcement spent several hours removing items from the residence.

Thomas and Joann were officially charged by the Department of Justice with one count of mail fraud on Sept. 30, 2019, and the charges were filed with the U.S. District Court in Seattle.

But a year later, the federal government upped the stakes, charging the couple with one count of conspiracy, four counts of mail fraud, four counts of wire fraud, two counts of aggravated identity theft, and finally, four counts of money laundering, charging documents reads.

The Thomases were arraigned September 17, 2020, and pled not guilty.

A RELATED CONVICTION

At the same time the feds were gearing up to charge the Thomases with a slew of crimes, they were also preparing a case against Darrell Winston, the owner of Renton-based City Biz who told local investigators that he helped Thomas do work for DD5.

Winston was charged with one count of lying to investigators on Aug. 18, 2020. According to court papers, he told the FBI twice that he submitted a formal bid to do work for the drainage district; the DOJ contended he did not.

Winston pled guilty September 2020, and was sentenced to six months of home detention with electronic monitoring, and 40 hours of community service on Feb. 19, 2021.