In August 2008, Lindemulder pled guilty to federal charges of willful failure to pay federal income taxes. She had failed to pay over $200,000 in back taxes. She had made a down payment on a $647,000 house and bought two new vehicles, despite being aware of her tax debt. She faced up to one year in prison, and a $100,000 fine.
In December 2008, Lindemulder was sentenced to six months in federal prison. The sentencing judge ordered that she live in a residential community corrections center for up to six months after her release from prison, and, one year of supervised release after that. She was also ordered to pay the estimated $294,000 owed to the U.S. government.
She was incarcerated at the Federal Correctional Institution at Victorville, near Adelanto, California, and was released on July 13, 2009. She was planning to blog from prison by writing letters to her webmaster and complete her GED.
She also planned to write books about her lesbian sex with other inmates.
During Lindemulder's incarceration, Jesse James was awarded custody of their daughter. Upon Lindemulder's release, James and Lindemulder engaged in a custody battle over their daughter. James had accused Lindemulder and her new husband, a convicted felon, of being unfit parents.
