John Hult

jhult@argusleader.com

A one-time exotic dancer convicted of filing a false tax return was sentenced Wednesday to nearly three years in prison and ordered to pay $214,606 in back taxes.

Veronica Fairchild, 42, collected $1.1 million between 2005 and 2008, mostly from a wealthy client named David Karlen.

She declared only 45 percent of that money as income on her tax returns for those years, which she didn't file until 2010. The remaining $643,648 was declared as a gift.

At her trial in June, Karlen testified that he'd paid Fairchild to dance, and later for sex. He claimed to have paid between $1,000 and $5,000 for a variety of sexual acts.

Fairchild denies ever sleeping with Karlen, and she says much of the money was meant as a loan. She said Karlen invented the stories about sexual encounters to cover for his failure to pay taxes on the monetary gifts.

The jury sided with Karlen, convicting Fairchild on four felony counts of filing a false return, which left her open to between 33 and 41 months in federal prison.

On Wednesday, Fairchild and her family pleaded for a probation sentence.

The mother of three children at home, including an infant daughter, promised to start dancing again in January and pay $1,000 a month toward her tax bill, which stands at more than $500,000 in back taxes and fees. She hasn't been danced recently because she's been pregnant.

She also promised to work on selling her house in Canistota, valued at $750,000, and to take out loans on her strip club in Okoboji, Iowa, Boji Nites. She was in talks with a group of lawyers about how to draw income from the business, as she can no longer hold a liquor license as a convicted felon.

She lost her husband to suicide 11 months ago, and she said she didn't want to leave her children without a parent at home. Her daughter, born of a different father, was born on Sept. 11.

"I don't care about the money. I'll do whatever I need to do … I don't want to lose my children," Fairchild said, choking back tears as her family looked on.

Her stepmother, Kay Fairchild, pleaded for mercy, as well. She's been a good mother to her own children and became the guardian to another boy.

"I know Veronica," she said. "We know that she's a good person, and she doesn't deserve to go to jail."

Judge Karen Schreier pressed Veronica Fairchild, however, on why she hadn't sold her home since her indictment or conviction and asked her why she hadn't paid any back taxes or filed returns for 2012 or 2013.

She told Schreier that she didn't want to sell the house because it had "sentimental value." She and her husband had worked on it together, she said.

The judge told Fairchild she hadn't done enough to show she was serious about repaying her debt. She also told her that a commitment to pay $1,000 a month, without a firm deal on the house or her business, was not a convincing promise for proper behavior on probation.

"Everything I look at tells me you're leading a life much, much greater than you can afford," Schreier said. "When you owe the Internal Revenue Service more than half a million dollars, you need to start really downsizing and looking at the world realistically."

Fairchild was sentenced to 33 months in custody, because she has a minimal criminal history.

She was ordered to turn herself in by Nov. 12.