Exotic Dancer Found Guilty of "Tax Seduction"

The Eighth Circuit Court of Appeals has just affirmed the conviction of an exotic dancer who tried to sidestep tax liability on money she received for her services (U.S. v. Fairchild, No. 14-3517, CA-8, 3/17/16). Now she is headed to federal prison for a stretch of almost three years.

This wasn’t just a case of dollar bills being tucked into a G-string. A jury determined that the dancer failed to report close to $1 million — $850,000, to be exact — in taxable income from performing private dances and sexual favors during the period spanning 2005 through 2008. Most of the money came from a single client.

For her part, the exotic dancer argued that the income constituted gifts and loans, not earnings from services performed. But the major client disputed this representation. He testified in court that he paid $1.1 million for her to dance intimately and have sex with him in private sessions outside the club, with each meeting costing between $1,000 and $5,000. According to his testimony, every one of the 37 payments was made in exchange for sexual acts. At trial, the dancer denied any sexual activity had occurred.

As reported by the Capital Journal, a publication covering the area, the major client in this case was arrested about a year ago in a police sting in Sioux City, Iowa aimed at cracking down on prosecution. The crime was classified as a misdemeanor.

The dancer, who was married until her husband committed suicide in 2013 and is the mother of three (one born after her conviction) was charged in 2014 with four counts of making and subscribing false tax returns over the four-year period. Following her conviction, a district court sentenced to her to 33 months in prison, with each count running concurrently, and ordered her to pay restitution on $214,000 of unpaid taxes. Now the Eighth Circuit Court has rejected her appeal.

This case illustrates the severity of the laws relating to willful tax fraud. Acts of prostitution or violence may result in a comparative slap on the wrist, but failing to pay federal income taxes can land you in the slammer.