The former owners of Teakwoods, George Krotonsky and Aubrey Sturdivant were convicted of three felonies each related to a multi-year scheme to evade paying certain Arizona transaction privilege tax (TPT), withholding tax, and individual income tax.
Krotonsky and Sturdivant were indicted by a State Grand Jury on November 22, 2021, alleging failure to pay transaction privilege tax and withholding income tax along with failing to file the corresponding returns between January 1, 2013 and October 31, 2019. The investigation shows that both Teakwoods locations were properly charging and collecting TPT from customers, however, the business owners kept the TPT collected from their customers instead of remitting the tax to the Arizona Department of Revenue.
An investigation also uncovered that between January 2013 and October 2019, Krotonsky and Sturdivant were withholding income tax from employees’ paychecks and not remitting that tax to the State, but instead kept the tax withholdings. The State Grand Jury charged Krotonsky with four counts of Filing a False Tax Return for underreporting on his Arizona individual income tax for 2015, 2016, 2017, and 2018. Similarly, the State Grand Jury charged Sturdivant with three counts of Filing a False Tax Return for underreporting on her Arizona individual income tax returns for 2017, 2018, and 2019.
A judge sentenced Krotonsky to the Arizona Department of Corrections to one and a half years, followed by seven years of supervised probation after his release. Krotonsky previously pled guilty to one count of Fraudulent Schemes and Artifices, a Class 2 Felony, and two counts of Filing a False Tax Return, Class 5 felonies.
The court ordered Krotonksy to pay restitution to the Arizona Department of Revenue in the amount of $1,974,569.16 and a fine in the amount of $100,000.
Sturdivant was sentenced to jail for nine months in the Maricopa County Jail and seven years of supervised probation. Sturdivant previously pled guilty to one count of Fraudulent Schemes and Artifices, a Class 2 Felony, and two counts of Filing a False Tax Return, Class 5 Felonies.
The court ordered Sturdivant to pay restitution to the Arizona Department of Revenue of $1,052,616.31 and a fine of $100,000.