Elaine Martin reached an agreement with federal prosecutors that will spare her from going to trial a second time after the 9th Circuit Court of Appeals last fall overturned her convictions on four tax fraud charges.
Martin, 69, who headed Meridian-based MarCon, pleaded guilty on Monday to one count of submitting a false tax return. In exchange the other three tax fraud charges were dismissed.
Prosecutors and Martin’s defense attorney agreed to a joint recommendation that Martin be sentenced to five years in prison for the 18 other counts of mail fraud, wire fraud and conspiracy that were not affected by the 9th Circuit ruling. On the tax fraud charge, the attorneys on both sides agreed to recommend a two-year sentence, to be served at the same time as the longer sentence.
Martin appeared before Chief U.S. District Judge B. Lynn Winmill, who followed the recommendations. Martin will spend two years less time in prison than that provided by her original sentence.
In October, a 9th Circuit panel found that jurors in the 2013 case were unfairly influenced by evidence Martin was audited in the 1990s for what the state of Idaho concluded were improper farm deductions on her tax returns.
Prosecutors used that evidence to argue that Martin had shown a pattern of deceit on her tax returns and that she knew she should have reported sales of used highway barriers and other materials that would have resulted in her paying an additional $100,000 in federal income taxes.
The appeals court ruled that evidence from the Idaho returns was irrelevant on the federal tax claims and should have been excluded from the trial.
At the same time, the appeals court found “overwhelming evidence” to support her convictions on 18 other counts of mail fraud, wire fraud and conspiracy.
Martin was charged after prosecutors said she shielded a portion of her income so she could improperly qualify for two programs offered by the U.S. Department of Transportation and the federal Small Business Administration that were supposed to benefit economically disadvantaged companies.
Between 1999 and 2006, MarCon received nearly $22 million from 88 contracts awarded through the transportation agency and the SBA. As the only certified vendor under the DOT program in Idaho and Utah, she enjoyed a virtual monopoly on contracts for concrete barrier and guardrail for all but one of those years.
Her personal share of the profits was $3.1 million, the amount she earlier forfeited to the Internal Revenue Service and the Idaho Transportation Department.
As part of her plea agreement, Martin agreed not to seek any portion of that money back, as well as $131,400 she provided in restitution and $22,860 in prosecution costs.
Martin sold MarCon to Concrete Placing Co. of Boise. The entire sale price went to satisfy the forfeiture order.
Martin is serving her sentence at a medium-security federal prison in Victorville, Calif.