Eugene R. “Trey” Britt III, who was part owner of former Statesboro bars Rude Rudy’s and Rum Runners, as well as bars and a restaurant in Tifton, Americus and Milledgeville, was sentenced to federal prison Wednesday for tax evasion.
Last October, Britt pled guilty to a single count of felony tax evasion in the same federal courtroom in Statesboro where he was sentenced Wednesday.
Britt, 53, from Milledgeville, was sentenced to 24 months in prison, as jointly announced by Deputy Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division and U.S. Attorney Jill E. Steinberg of the Southern District of Georgia.
U.S. District Court Chief Judge J. Randall Hall also ordered Britt to pay $362,249.53 in restitution and a fine of $10,000, and to serve three years of supervised release upon completion of his prison sentence. There is no parole in the federal system.
“Trey Britt created a scheme to illegally withhold profits that should have been remitted to the U.S. Treasury,” Steinberg said. “Avoiding the obligation of paying taxes places a greater burden on all law-abiding taxpayers, and Britt is being held accountable for his actions.”
He and his brother, former Statesboro City Council member Will Britt, are among several central and southern Georgia businessmen accused of taking part in a scheme that federal prosecutors say disguised the true ownership of bars.
Will Britt, 48, pled guilty, also to a single count of tax evasion, in April 2022 and agreed to pay $352,404 in restitution. Hall then sentenced him in August to serve 33 months in federal prison, which he began serving in December.
As described in court documents and testimony, Trey Britt engaged in a scheme to evade taxes owed to the IRS on income from multiple bars and a restaurant he and others owned near college campuses around Georgia. As part of the scheme, Trey Britt and others disguised their ownership in the bars by causing each establishment to be owned on paper by a single person. Britt and the other true owners then shared in the profits by skimming cash and disbursing it amongst themselves.
Trey Britt personally controlled the distribution of cash for three of the establishments. As part of his guilty plea, Britt acknowledged that for approximately two decades he skimmed cash from his bars and restaurants and did not report it on his tax returns.
Six named bars
The government alleged, and Trey Britt by his plea last October agreed, that he was part owner of BGRG Inc., which did business as the Capital City bar and 119 Chops restaurant in Milledgeville.
“James Stafford was the sole owner on paper” but in practice, the business “had multiple partners, including the Defendant, who had varying ownership percentages,” the charging document states.
Meanwhile, Chrysha Inc., a corporation formed in April 2002, did business as Rum Runners, a bar in Statesboro. Again, “Stafford was the sole owner on paper” of Chrysha Inc., but it had multiple partners, who held varying percentages, including Britt. Rude Rudy’s, also a bar in Statesboro, was operated as a separate limited liability company, formed in January 2007 and owned “by Individual F,” but also really with multiple partners, including Britt.
Stafford, then 44, entered a guilty plea in March 2022 to a single tax evasion count but has yet to be sentenced.
Other bars of which Britt was a previously undisclosed part-owner included The Gin in Tifton and Dillinger’s in Americus.
“The true owners shared in the profits generated by the establishments by skimming cash and disbursing it to the true owners in accordance with their ownership percentage,” the charging document stated. “The establishments then failed to report the skimmed cash as income on federal income tax returns filed with the IRS.”
Target year
In each case, the federal prosecutors have hinged the specific charge on a single tax year – in Trey Britt’s case 2015 – but allege that the conduct was going on much longer.
“Mr. Britt stuck with this as his business structure for nearly two decades and consistently failed to report the cash receipts as income,” Smith, the Tax Division trial attorney, told Hall.
The charging document states that Britt provided “false information to Accountant A,” a certified public accountant in Sylvania, for preparing Britt’s IRS Form 1040 for tax year 2015. Britt failed to inform the accountant of cash distributions he received from Capital City, Chops, Rum Runners, Rude Rudy’s, The Gin and Dillinger’s, the document states.
While he received cash from all six establishments, he owned a majority interest in three – Capital City, Chops and Rum Runners – and disbursed cash to their true owners, including himself, the government asserted.
According to the plea agreement, Britt reported his total income for 2015 as a loss of $127,290, while knowing that his “income for that year was substantially greater.” But the government based the $362,249 restitution total on unpaid taxes figured for six years, 2011-2016.
The $535,772 loss calculation was for sentencing guideline purposes and could include revenue the government claims its lost from other taxpayers as a result of his actions.