Naperville theater owner accused of evading $1.3 million in taxes
The owner of Hollywood Palms movie theater in Naperville is facing charges in two cases of tax evasion, fraud and failure to file tax returns, and he's accused of owing the state at least $1.3 million, prosecutors said Wednesday.
Edwin C. "Ted" Bulthaup III, 57, of Woodridge, is accused of evading sales taxes and use taxes at the Naperville theater and at Hollywood Blvd theater in Woodridge, which he owned and operated until Feb. 10 of this year.
He is accused of underreporting sales by a total of $18 million at the two theaters between 2009 and 2013.
"This defendant owes the state at minimum $1.3 million in underreported tax liabilities," Assistant Illinois Attorney General Christina Chojnacki said Wednesday in DuPage County court.
Bulthaup appeared at a bond hearing Wednesday afternoon by video feed from DuPage County jail after authorities said he was taken into custody that morning.
"I've never committed fraud," Bulthaup said, wearing an orange jail jumpsuit.
Charges he faces in each case include sales tax evasion, fraud and 104 total counts of wire fraud, Chojnacki said.
At Wednesday's hearing, Judge Robert E. Douglas set Bulthaup's bail at $125,000 for each case for a total of $250,000. That means he would have to pay $25,000 to get out of jail.
If Bulthaup posts bond, he will be required to provide the source of the bail funds and prove the money was not obtained through tax fraud or evasion. He also would be required to turn in his passport, and he would be scheduled to appear Jan. 5 at the DuPage County courthouse in Wheaton. Otherwise, his next court date is Dec. 30.
The Illinois Department of Revenue began investigating Bulthaup in February, when agents searched his businesses and seized records and computer information. Revenue department agents testified Tuesday in front of a grand jury in DuPage County, which returned two indictments on multiple counts of felony tax evasion, fraud and failure to file tax returns before Bulthaup was taken into custody.
"When a local businessman evades his responsibilities to pay taxes, it hurts the community, it hurts the state and it causes every taxpayer to have to reach a little deeper to help pay the bills," Brian Hamer, director of revenue, said in a news release.
Some of the tax liabilities mentioned in the two cases come from use taxes on items the business would buy to support its operations, such as a roll of tickets to sell to moviegoers or a computer on which to conduct ticket sales, said Susan Hofer, spokeswoman for the revenue department. Bulthaup also is accused of evading sales taxes.
"We're talking about money that you pay on your movie ticket that's never supposed to go in his pocket at all," Hofer said. "He collects that money from his customers on behalf of the state."
Hollywood Palms, 352 S. Route 59 in Naperville, opened in 2009 as a cinema, bar and restaurant that promotes itself as "Chicagoland's premiere moviegoing experience with real class." It is one of the few facilities to offer patrons full dining and drinking options while watching a movie. The theater also hosts frequent celebrity appearances at movie showings.
Bulthaup sold Hollywood Blvd. at 1001 E. 75th St. in Woodridge in federal bankruptcy court, documents show. Since Feb. 10, Hollywood Blvd has been owned and operated by Hobson Financial Group of Illinois. However, Hofer said Bulthaup still owes the taxes he is accused of not paying for the Woodridge facility.
Staff members at both theaters said they were open for usual movie showings Wednesday.