DENVER – The former bookkeeper at a Cortez business supply store is probably headed to prison after pleading guilty Wednesday to four counts of income tax fraud.
Brian K. Shoults of Mesa, Ariz., was indicted for defrauding Office Outpost of $255,000 over four years. He also forged his W-2 tax forms to hide the ill-gotten gains.
In return for pleading guilty to four counts of tax evasion, federal prosecutors dropped 123 counts of wire fraud against Shoults related to stealing from his employer.
As bookkeeper for the store, Shoults ran the payroll and systematically overpaid himself, according to a grand jury indictment in February. He then forged the store’s books to hide the theft.
Office Outpost owner Ron Curtis discovered the scheme and reported it to Cortez police, who brought the Internal Revenue Service into the investigation. Shoults used bank transfers to siphon money away from the store – a violation of federal law.
“Basically, I lost my life savings and had to start all over.” Curtis told the Cortez Journal earlier this month.
As part of his plea agreement, Shoults pledged to pay $262,413.16 in restitution to Curtis.
Chief U.S. District Court Judge Marcia Krieger asked only yes-or-no questions of Shoults during his half-hour hearing Wednesday in Denver.
Shoults is free on a $50,000 bond, and he showed up in court wearing a tie, dress shirt and dress pants.
Krieger will sentence Shoults at a Sept. 9 hearing in Denver. His lawyer, Brian Leedy, is arguing for a sentence of 15 to 21 months. But federal prosecutor James Candelaria says a sentence of 21 to 27 months is appropriate because Shoults abused his position of trust at his former company.
According to his plea agreement, Shoults owes the government $66,616 on the income he made by defrauding the store. Even though he made the money illegally, the law says he owes income taxes on it.
joeh@cortezjournal.com