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Tuesday, March 24, 2009
Cheeks Gentleman’s Club owner convicted of tax charges
DAYTON — The owner of Cheeks Gentleman’s Club was convicted Tuesday, March 24, of three counts of filing a false corporate income tax return.
The trial of Elbert Lee Hale and his ex-wife Joyce Hale started March 16. The jury got the case on Monday, March 23.
Elbert Hale, who lives in Washington Twp., was convicted of three counts concerning the 2002, 2003 and 2004 income tax years. The jury acquitted Hale of 23 counts of structuring financial transactions.
Joyce Hale, of Dayton was found guilty on one count of making a false statement to federal investigators. The jury acquitted her of a second count of the same charge.
Elbert Hale has owned and operated Cheeks Gentlemen’s Club, 906 Watertower Lane, West Carrollton, since 1998. Evidence presented at trial showed that Hale intentionally understated the club’s business income on corporate income tax returns for the period spanning 2002 through 2004, according to Gregory G. Lockhart, U.S. Attorney for the Southern District of Ohio.
The counts involving structuring financial transactions dealt with 23 occasions between July 2006 and January 2008, when Elbert Hale deposited more than $10,000 cash into company accounts, but broke the deposits into smaller amounts to evade federal cash transaction reporting requirements, according to the indictment.
Joyce Hale was charged with telling investigators in May 2006 that she did not know about the club’s financial information. She told them she was unaware of how income generated by female dancers was accounted for and did not know of any accounting books or ledgers for the club, according to the indictment.
Federal investigators testified that they seized a secret set of accounting books from the trunk of Joyce Hale’s car while executing search warrants at Cheeks on May 12, 2006. Prior to seizing the records Mrs. Hale denied to Federal agents having any knowledge of the existence of such books. This second set of books, penned in Joyce Hale’s handwriting, documented an under-reporting of business income of more than $3.1 million in the three-year period, Lockhart said.
“The government called 17 witnesses to testify during the trial, including two former dancers and a business partner of Hale’s,” Lockhart said. “As a result of their testimony and the evidence presented, a conviction was obtained.”
Each of the three counts of filing false corporate income tax returns is punishable by three years imprisonment, a $100,000 fine, restitution of unpaid taxes along with interest and penalties to be calculated by the IRS. Making false statements is punishable by up to five years imprisonment.
Chief U.S. District Judge Susan J. Dlott will schedule a sentencing hearing.
