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MONUMENT, COLO. -- The U.S. Department of Justice sentenced a Monument woman to three years in federal prison for failing to file a series of income tax returns that included $1.6 million in business income.

Linda Abramson-Schmeiler owned a hair salon in Colorado Springs called Hair Drama for a number of years prior to the sentencing. Her salon carried brand name hair products, which she bought from various distributors and resold to others besides her customers. This was not authorized, but it became the primary focus of her business. According to the Justice Department, the defendant essentially functioned as a “collector” or product diverter in unauthorized parallel distribution markets for these products, commonly known as “gray markets.”

In late July 2000, Schmeiler became a regular supplier of these products for a large wholesale business out of New York called Pro's Choice Beauty Care. She would secure an order, have it driven to Denver by her husband, and a truck from the New York company would load the products and take them back to New York. Pro's Choice would then wire money to Schmeiler.

Pro's Choice became Schmeiler's primary customer over time.

On her income tax return forms for the years 2002-2005, Schmeiler reported sales totaling no more than $6.1 million, but she received payments from Pro's Choice that alone totaled more than $7.7 million.

Schmeiler said at trial she did not believe that she had to report the $1.6 million in receipts because the payments were offset by her product purchases, and so were part of transactions that resulted in no net profits.

She was charged with five counts of filing false income tax returns, and was found guilty on all five counts in October. The U.S. District Court also ordered her to pay a $7,500 fine and pay $709,672 in restitution to the IRS as part of a one year supervised release term she will serve after she gets out of prison.

“As tax season approaches, this case demonstrates that fraudulently attempting to evade taxes results not only in severe financial consequences, but can also result in going to federal prison,” U.S. Attorney John Walsh said in a statement.

Schmeiler and her husband, a Colorado Springs police officer, tried to defend that the extra money was a series cash payments she got from an inheritance.

“This sentence should send a clear message; hiding income from the IRS is a crime, and the consequences of such acts can and will result in jail time”, Sean Sowards, the Special Agent in Charge with IRS Criminal Investigation of the Denver Field Office, said in a statement.