ATLANTIC CITY, N.J. — A former City Councilman from Atlantic City pleaded guilty Thursday to conspiring to defraud the IRS of nearly $120,000 in taxes from a Boardwalk rolling chair business he owned with two other people.
John Schultz pleaded guilty in federal court to conspiracy to defraud the United States.
The 74-year-old admitted that he and two partners hid cash receipts from the operation of the business and did not report this revenue to the IRS. Schultz also admitted the business maintained a second set of books, which tracked the unreported cash revenue taken out of the business.
He faces up to five years in prison when he is sentenced Jan. 9.
“Everyone was a little sloppy about collecting and reporting the cash proceeds,” said his lawyer, Ed Jacobs. “John admitted his wrongdoing, and is going to go on with his charitable work and keep doing good things as he has done for decades.”
Schultz served on the City Council from 1994 to 2001, and from 2006 to 2009.
His charitable organization, the Schultz-Hill Foundation, is a major philanthropic group in Atlantic City, raising money for the arts, education and community programs.
Jacobs said he will seek probation for Schultz, adding the former councilman has agreed to pay back taxes and penalty fees stemming from the case.
The U.S. Attorney’s Office said Schultz and two others were partners in Royal Rolling Chairs Inc., a company that operates some of the famous wheeled chairs in which guides push tourists up and down Atlantic City’s Boardwalk.
Two others previously pleaded guilty in the case.
Schultz was charged in a 2006 case in which a fellow Atlantic City Councilman, Eugene Robinson, was lured to a motel and filmed having sex with a prostitute in an attempt to force Robinson to resign. Robinson instead went to authorities.
Schultz was charged with conspiracy, accused of putting former Council President Craig Callaway, a fellow defendant, in touch with a video expert.
Over the objections of the state Attorney General’s Office, Schultz was admitted into a pre-trial intervention program and the charge was expunged from his record.
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