SANTA FE WOMAN FACING $1.7M TAX BILL.(Main)

Byline: TOM SHARPE

Couple enter pleas in case over adult Internet services income

By Tom Sharpe

The New Mexican

A Santa Fe woman and her husband pleaded guilty Thursday to one count each of conspiring to defraud the federal government regarding taxes on income from online adult entertainment services.

Carolynne Tilga, 50, must pay at least $1.7 million in back taxes and faces up to five years in prison, according to the U.S. Department of Justice.

Her husband, Michael Chandler, 51, also faces up to five years imprisonment when sentenced, according to a statement from the U.S. Attorney's Office in Albuquerque.

A federal grand jury in April indicted Tilga on 10 charges, including one of conspiracy, six of tax evasion and three of filing false tax reports. The plea agreement calls for the other nine counts to be dropped at a yet-to-be-scheduled sentencing hearing before U.S. District Judge James Browning.

Chandler was indicted only on the conspiracy charge.

The couple's bookkeeper, Helen Geer of Santa Fe, has entered a not-guilty plea to indictments for conspiracy and filing false tax returns. A trial is pending in her case.

According to the grand jury indictment, Tilga, Chandler and Geer concealed from the U.S. Internal Revenue Service income from Tilga's adult-entertainment Internet businesses from 1998 through 2004.

Instead, it says, Tilga and Chandler used the money to buy:

u A residence in Las Campanas, west of Santa Fe, for $1,382,000 in 1999.

u Property in Taos Ski Valley for $186,982 in 1998.

u A residence at Kilauea, Hawaii, for $1,850,000 in 2002.

u A lot in the Telluride, Colo., for $705,000 in 2000.

u A lot in Mount Crested Butte, Colo., for $305,000 in 2000.

u A condominium in Aspen, Colo., for $745,000 in 2004.

u A 2000 Lexus for $61,017 from Lexus of Albuquerque in 2000.

u A 1998 Ford truck for $19,695 from Capitol Ford of Santa Fe in 2001.

u A 2001 Mercedes Benz for $56,440 from Premier Motor Cars of Santa Fe.

The assets and income were concealed through off-shore entities, the indictment states.

"In her plea agreement, Tilga admitted that, since the late 1990s, she has been a minority owner of certain Canadian Internet businesses that provide computer billing services to entrepreneurs who market on-line pornographic materials to adults," says a news release from the U.S. Attorney's Office. "Tilga also admitted that the Canadian businesses generated substantial revenues between 1999 and 2006 and she directed her share of the revenues to the off-shore entities."

The statement said Chandler, in his plea agreement, admitted that he assisted his wife in moving money from off-shore trusts to purchase property in the United States, knowing the trusts were being used to evade taxes.

Reached Thursday, Tilga declined to comment on case, other than to ask, "Is this truly newsworthy for you people?"

Roma Theus, a Florida lawyer who represented Tilga, said federal rules prohibit him from making public statements about any case that remains in litigation.

Cornell University's online alumni magazine reported in 2004 that Tilga, a member of the class of 1982, and her husband "took a heliskiing trip in Alaska, where the skiing was exceptional -- 'looks just like the photos from ski magazines' -- but were happy to return home to Santa Fe."

A Wikipedia entry said Tilga was born in Bronxville, N.Y., trained in the culinary arts at La Varenne in Paris, started an after-school organic-cooking program for children in Santa Fe and was writing a series of interactive children's cookbooks. She was identified as a consultant for Internet-based businesses, a ski racer who placed first in the New Mexico Corporate Cup in 2007, a Western pleasure horse rider and a "fitness and nutrition addict."

In 2006, Tilga and her Adult Action Cam site were named as defendants in a case filed in Northern California's federal district court by anti-spam activist Daniel Balsam. A judge later dismissed Tilga from the case.

Contact Tom Sharpe at 986-3080 or tsharpe@sfnewmexican.com.