November 17, 2010
OWNER OF DENVER SUGARS/DENVER PLAYERS INDICTED
DENVER – Brenda L. Stewart, age 35, of Denver, Colorado, was indicted by a federal grand jury in Denver late yesterday on charges of tax evasion, use of interstate communication facilities in aid of racketeering, witness tampering, and money laundering related to her prostitution business, United States Attorney John Walsh and IRS – Criminal Investigation Special Agent in Charge Christopher Siegerson announced. A summons was issued for Stewart to appear in U.S. District Court in Denver for her initial appearance on November 30, 2010, at 1:30 p.m. before U.S. Magistrate Judge Craig B. Shaffer.
According to the indictment, the first tax evasion count alleges that beginning on January 1, 2005, and continuing through April 17, 2006, Stewart did willfully attempt to evade and defeat payment of income tax due to the United States for the calendar year 2005. Stewart earned income from her prostitution business known as Denver Sugar/Denver Players, first through working as a prostitute and later through purchasing and then operating the Denver Sugar/Denver Players business.
The second tax evasion count alleges that beginning on January 1, 2006, and continuing through April 16, 2007, Stewart did willfully attempt to evade and defeat income tax due to the United States for calendar year 2006.
Both counts allege that Stewart created a company called Phoenix Media and Consulting LLC. She used this company to open a bank account to receive and distribute money from her prostitution business. Stewart used some of the receipts from the business to pay the purchase price of $150,000 from the previous owner. She also did not provide a majority of the employees with Forms 1099 or other required tax documents. Stewart filed a false 1040 individual income tax return for 2005, and she failed to file an individual tax return for 2006.
According to the use of interstate commerce facility in aid of racketeering counts, Stewart did use a facility in interstate commerce, namely wire communication facilities, with intent to distribute the proceeds of her unlawful activity – namely the prostitution offenses. She is also accused of using an interstate commerce facility in aid of racketeering with the intent to promote, manage, and facilitate prostitution offenses by maintaining and causing the maintenance of websites for her businesses.
On January 25, 2008, search warrants were executed at Stewart’s home and the “in-call” prostitution address. The witness tampering allegation is that on January 28, 2008, after the search warrants were executed, Stewart corruptly asked the person she paid to maintain her business websites to permanently delete those websites.
The money laundering counts in the indictment allege that Stewart did knowingly conduct and attempt to conduct financial transactions affecting interstate commerce by transferring funds from a Phoenix Media and Consulting LLC account at Community Banks of Colorado into the defendant’s personal account, knowing the proceeds were from the use of interstate commerce facilities in aid of racketeering activity. The transactions were designed, the indictment states, to conceal and disguise the nature and source of the proceeds of the unlawful activity.
Lastly, the indictment includes a forfeiture allegation, which states that upon conviction of one or more of the offenses listed above, Stewart will be required to forfeit the traceable proceeds of her illegal activity, including over $110,000 in U.S. currency.
If convicted of tax evasion, the defendant faces not more than 5 years in federal prison, and a fine of not more than $250,000. If convicted of use of an interstate communication facility in aid of racketeering, Stewart faces not more than 5 years imprisonment, and up to a $250,000 fine, per count for each of the 28 counts. If convicted of witness tampering, the defendant faces not more than 20 years imprisonment, and up to a $250,000 fine. If convicted of money laundering, Stewart faces not more than 20 years in federal prison, and a fine of up to $500,000, per count for each of the 39 counts.
“The success of this investigation is attributable to our partnership with the Denver Police Department and the United States Attorney’s Office,” said Christopher M. Sigerson, Special Agent in Charge, IRS Criminal Investigation, Denver Field Office. “Each agency fulfills a unique role and IRS CI’s mission in this regard is to follow the money trail to financially disrupt and dismantle these organizations.”
This case was investigated by the IRS – Criminal Investigation with assistance from the Denver Police Department.
The defendant is being prosecuted by Assistant U.S. Attorney Matthew Kirsch.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
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