A former Atlantic City councilman pleaded guilty Thursday to conspiracy to defraud the IRS of $119,800 in unpaid taxes.
John Schultz, 74, pleaded guilty to hiding gross cash receipts from his rolling-chair business and maintaining a second set of books not shared with the government.
Schultz declined to comment. He is scheduled to be sentenced Jan. 9, 2017.
According to the U.S. Attorney’s Office, Schultz bought into the business in 2007. The plot to hide cash from the IRS began in September 2006, and the company concealed $342,632 in revenue during the 2007-09 tax years.
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Schultz’s business partner, William Boland, previously pleaded guilty to the same conspiracy charge and is scheduled for sentencing Oct. 25. Abdus Mian, the bookkeeper for Royal Rolling Chairs Inc., pleaded guilty to making false statements to federal investigators and was sentenced to a year of probation April 4.
Mian admitted lying to investigators about having just one set of financial records for the business and that he did not know the owners of the company were taking cash from the business.
Schultz is a founding member of the Atlantic City Metropolitan Business & Citizens Association, a nonprofit civic group that has provided more than $280,000 in scholarships, teacher grants and Thanksgiving turkey donations over the past 25 years.
Atlantic City attorney Lloyd Levenson, who serves as an officer and general counsel for the charity, said Schultz’s plea will not affect the charity’s efforts.
“The organization has been around for 26 years. It is very well respected. There are plenty of people, including myself, who are very active in that organization. We’ll certainly continue its successful mission for scholarships and all the other good deeds the organization does in the community.”
Levenson said the criminal plea was out of character for Schultz.
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“Everybody makes mistakes. It certainly doesn’t change John’s good deeds over his 70-plus years. When you look at the entire person, this blemish is just that, a blemish,” Levenson said.
The conspiracy was investigated by the IRS and the FBI.
Schultz was indicted in 2007 in a scheme to blackmail Councilman Eugene Robinson by paying a prostitute to seduce him and filming the tryst. Schultz was allowed to enter the pretrial intervention program after he was charged with conspiracy to commit criminal coercion and invasion of privacy.
Robinson settled his civil lawsuit against Schultz before it went to trial in 2009.
A year later, Schultz was honored with the Spirit of Hospitality Award by the Atlantic City Convention & Visitors Authority, an honor Gov. Chris Christie called inappropriate.
Schultz was an unnamed co-conspirator in the 2014 complaint filed against Boland.
Schultz was a councilman from 1994 to 2001 and from 2005 to 2010. He did not seek re-election after his indictment.
Staff Writer Christian Hetrick contributed to this report.