Will Britt, who served on Statesboro City Council at a time when bars and underage drinking became a topic of controversy for the city, pleaded guilty in federal court Wednesday morning to a felony tax evasion charge resulting from a scheme that disguised the true ownership of bars – of which he was in fact part owner – in several Georgia communities.
Inside the Prince H. Preston Federal Building, Britt stood before Chief Judge Randal Hall of the U.S. District Court for the Southern District of Georgia and gave brief answers such as “Yes, sir,” and “No, Your Honor,” to questions that confirmed the guilty plea. Britt acknowledged that he has agreed to pay $352,404.54 restitution to the Internal Revenue Service and that the government’s total “amount of loss,” for purposes of sentencing guidelines, is $867,376.06.
The $352,404 represents Britt’s additional Form 1040 income tax due for 2010-2016, but according to the sentencing agreement this does not include interest, which the IRS will still assess. The larger, $867,376, figure may include the government’s losses of revenue from income not reported by others involved in the scheme.
Britt has not been sentenced yet. That will come at a later hearing, after the judge reviews the guidelines and receives a pre-sentencing report prepared by probation officers.
Waiving his rights to be charged under an indictment that would have required a majority decision by a grand jury and also to an eventual jury trial, Britt instead pleaded to an “information” filed by federal prosecutors. U.S. Attorney for the Southern District of Georgia David H. Estes and Assistant U.S. Attorney Christopher Howard had signed that document.
So had David Zisserson, assistant chief of the Tax Division at the U.S. Department of Justice. Zisserson and one of the division’s trial attorneys, Casey S. Smith, both based in Washington, D.C., represented the government Wednesday in the Statesboro courtroom.
The judge personalized statements of fact asserted in the plea agreement with the pronoun “you,” in asking Britt whether he agreed with these facts.
One asserted fact, which Britt confirmed for the court, was that he failed to inform an accountant, identified as “Accountant A” who operated a firm in Sylvania, of cash distributions he received from bars or restaurants called The Milltown Groove, Dillinger’s, Bluewater Saloon, The Gin, Flip Flops, Rude Rudy’s, Rum Runners and Capital City and 119 Chops. Both Rude Rudy’s and Rum Runners were bars, which passed as restaurants at a time when Statesboro did not license bars as such, in University Plaza. The other establishments were in other towns across southern and middle Georgia.
“You caused to be prepared, and signed a false and fraudulent … individual tax return that reported that your and your spouse’s total income for 2014 was $36,845, when in fact as you well knew, your and your spouse’s total income for the year was substantially greater,” Hall recited.
That was after a recitation of other paragraphs about the specific bars and the unreported income.
For example, Britt “misrepresented to Accountant A” that an “Individual B” was the sole owner of Dillinger’s, a bar in Americus, “when as the Defendant well knew, he and others also had ownership interests,” and “further failed to inform Accountant A that cash was distributed to the true owners of Dillinger’s.” As a result, Dillinger’s income for 2014 was reported as $214,452, when it was substantially more.
For that same year, The Milltown Groove, a bar in Valdosta, which was also owned on paper by “Individual B” but had multiple partners, including Britt, was reported as having gross receipts or sales of $141,344, when he knew those receipts or sales were substantially greater, Britt agreed. Bluewater Saloon, also in Valdosta, was owned on paper by “Individual C” but also had multiple partners “who had varying ownership percentages in the business,” as the prosecutors asserted in regard to each bar.
The Gin, a bar in Tifton, was owned on paper by “Individual D.” Flip Flops, another Valdosta bar, was owned on paper by “Individual E.”
BGRG, a corporation formed in September 2010, did business as Capital City and 119 Chops, a bar and restaurant in Milledgeville, with “Individual G” also the sole owner on paper.
Past Boro bars
Rude Rudy’s, founded in Statesboro in January 2007, was owned on paper by an “Individual F,” but really belonged to multiple partners, the government asserted. Finally, Chrysha Inc., was a Georgia corporation formed in April 2002, with “Individual G” as is sole owner on paper. But again, Britt and other partners owned varying percentages and received cash shares, the government asserted. Chrysha Inc. did business as Rum Runners.
Last month, James Stafford, who was nominally the sole owner of Chrysha Inc. and BGRG Inc., also pleaded guilty to tax evasion as part of the same scheme, according to a news release the Justice Department issued Wednesday. Stafford hasn’t been sentenced yet, either.
Britt was charged with a single count of tax evasion. In regard to each business, the specific allegations federal prosecutors cited as supporting the charge were based on fraudulent Form 1040 returns for tax year 2014 filed for the supposed sole owners in January or February 2016. But the agreement breaks down the total restitution into separate amounts for each of the seven tax years, 2010 through 2016.
3 council terms
Not mentioned in the courtroom or documents, Britt was an elected member of Statesboro City Council from January 2004 through December 2015.
In September 2014, City Council accepted a settlement in which another man – neither Britt nor Stafford – named as the owner of Rude Rudy’s agreed to surrender its license and close the bar permanently. This followed the Aug. 28, 2014, death of Michael Gatto, 18, a Georgia Southern University student from a beating received there at the hands of an off-duty bouncer. The bouncer, 20 at the time, Grant James Spencer, pleaded guilty to voluntary manslaughter in October 2016 and received a 20-year prison sentence.
Gatto’s death led to an unsuccessful lawsuit by his parents against the city, but also to reforms of Statesboro’s alcoholic beverages ordinance and passage of a state law prohibiting people under age 21 from working as bouncers.
In the late 1990s and early 2000s, Britt was the acknowledged owner of other Statesboro drinking establishments, including Legends Bar & Grill and the Woodin Nickel.
He was no longer a City Council member in February 2017 when FBI and IRS agents seized documents from his home in Statesboro as well as from several businesses across the state.
The maximum possible sentence for the tax evasion conviction is five years in prison, three years supervised release, a $250,000 fine, the costs of prosecution, forfeiture of assets and a $100 special assessment.
But the government will recommend that Britt “be sentenced to the low end of the advisory guidelines range determined by the court at sentencing.” This consideration is conditioned “only on his cooperation and truthfulness” and he is not required to “make a case” against any particular person, the agreement states.
However, the judge will not be bound by the recommendation.
“Did anyone promise, predict or make a prophecy that you would receive a specific sentence in this case?” Hall asked.
“No, sir,” Britt said.
Then he said, “Yes, sir,” when the judge asked if he was pleading guilty because he agreed with the facts asserted and admitted that a prosecution would be successful. With his defense attorney, Michael Classens, standing beside him, Britt signed the plea agreement.
No date has been set for sentencing.
“We are confident that the process will proceed in the regular fashion and that the result at sentencing will meet the several systemic goals that are established by law,” Classens replied in an email later Wednesday.
Britt was never arrested or jailed, and Hall set a $30,000 unsecured bond for his continued freedom awaiting sentencing. Initially, the judge sought to restrict his movements to the Southern District of Georgia, but Classens noted that Britt now resides in Bluffton, S.C., and that his self-employment, arranging events for businesses, would soon include trips to Boston, Nashville and rural Alabama.
So the judge included the state of South Carolina in the permitted area and said Britt could work with probation officers about flexibility for work trips.