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View Full Version : Mesa bookkeeper admits stealing $1.6M for son's martial arts studio



plasma
9/27/2015 7:48am,
Bullshido Facebook Page got an anonymous tip regarding East West Karate School in Mesa, AZ with a new article:

URL:http://www.azcentral.com/story/money/business/consumer/2015/07/12/mesa-bookkeeper-admits-stealing-sons-martial-arts-studio/30000329/


A Mesa bookkeeper who embezzled $1.6 million that helped fund her son's martial-arts studio will plead guilty to a single count of tax evasion as part of a plea deal.

Federal authorities have agreed to drop 47 of 48 charges against Deanna Frader, who admitted writing checks to herself while employed as office manager of Ardent Sound Inc., a Mesa-based ultrasound imaging company.

Frader told authorities she wrote $43,603 worth of checks to herself, $786,812 to a company she created and $708,311 to a related business account from 2008 to 2012, when she left the company.

Authorities say Frader cooked the company's books and fabricated a loan agreement between herself and the Ardent's president, forging his signature, to hide the theft.

They say she used some of the money to pay her personal bills and living expenses. Records show she plowed the rest of it into a martial-arts studio she operated with her son called Kaizen Martial Arts Academy in Mesa, which is now closed.

Officials with Ardent could not be reached for comment Friday.

Ardent, founded in 1994, runs laboratories and prototype facilities. Its website bills the company as an industry leader in research, development and manufacture of diagnostic ultrasound imaging products and technologies.

Frader set up two checking accounts for the martial-arts academy, where she moved about half of the stolen money, court documents show. She also used money to pay the academy's rent, which averaged about $14,756 a month over four years.

Frader's son, Derek Frader, was not named in the indictment. Records show he is now a master instructor at East West Karate in Mesa, which opened in 2014. Deanna Frader was the only person listed in East West's corporation documents when the company was formed, records show.

Neither Deanna Frader nor Derek Frader could be reached for comment Friday.

U.S. District Court records show Deanna Frader filed a Chapter 7 bankruptcy in 2010, asking the court to dissolve her debts. She told the court that she had about $410,000 in liabilities and $162,000 in assets.

She claimed to have a monthly income of $3,800 and expenses of $4,635. At the same time she filed bankruptcy, she had stolen hundreds of thousands of dollars, records show.

The accounts and the companies Frader used to hide the stolen money were not listed in her bankruptcy, which records show was closed in 2012. The bankruptcy was not mentioned in the indictment.

Internal Revenue Service agents arrested Frader in February. She initially was charged with 35 counts of mail fraud, four counts of tax evasion and one count of identity theft.

Authorities said Frader didn't pay any taxes on the money she stole and consequently underpaid her federal income taxes in 2008, 2009, 2010 and 2012, for a total of $497,763.

"I willfully failed to include these embezzled amounts as income on those returns, knowing that this would result in the underpayment of income taxes due," Frader said in the plea agreement.

As part of her deal, Frader pleaded guilty only to the 2010 tax evasion charge.

A tax evasion charge carries a maximum five-year prison sentence, $100,000 fine and five years' probation. But under terms of the agreement, Frader faces no more than 37 months in prison.

Frader also agreed to repay $1.6 million to Ardent and $497,763 to the IRS.

She is scheduled to be sentenced Sept. 28.

According to the Source:


The article mentions another school called East West Karate that she is the only one on the corporate filing
Here is a school in East Mesa whose ownership is on its way to prison. With the order to repay over 2.1 million dollars, it will definitely be a place to steer clear of.

sweats
9/27/2015 9:34am,
Nearly $15,000 a month in rent. What the hell.

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Eerowest
10/15/2015 1:34pm,
This is unbelievable.