Fitness-chain owner guilty of not paying taxes

For nearly five years, local businessman Donald Stump collected sales taxes from two of his fitness centers but failed 57 times to forward that full amount to the state, a Lucas County assistant prosecutor said Tuesday.

An owner of the Lifestyles for Ladies Only chain, Stump entered a plea in Lucas County Common Pleas Court for failing to submit thousands of dollars in sales taxes to the state. He pleaded no contest Tuesday to one count of failure to remit sales taxes.

As part of the agreement, a second felony charge of aggravated theft will be dismissed at his Oct. 19 sentencing hearing.

"Based upon the amount of sales tax liability Mr. Stump is responsible for, this plea agreement was the appropriate resolution," Mr. Spryszak said.

Judge Frederick McDonald found Stump, 58, of Temperance, guilty of not paying at least $610,000 in sales taxes over a period of five years. The taxes were owed from Stump's businesses at 4920 Monroe St. and 2580 Parkway Plaza in Maumee.

Mr. Spryszak said in court the amount owed the state, not including penalties and interest, was last calculated in May to be $611,515.35. He said Stump missed several payments since then but at one point gave his attorney $23,000 to put toward restitution.

A final restitution amount will be available at Stump's October sentencing date.

Stump faces up to 18 months in prison and a $5,000 fine when sentenced. Mr. Spryszak said as part of the plea negotiations that the prosecutor's office will recommend community control.

Stump and his wife left the courtroom after the hearing Tuesday without comment.

The conviction was the result of a lengthy investigation by the Ohio Department of Taxation. According to the department, of the nearly $700,000 owed in sales tax from the two Toledo businesses, less than $75,000 had been paid in the period between June, 2005, and February, 2010.

As president of the Lifestyles corporation, Stump was listed as the responsible party in the investigation, records indicate. The allegations are only for Stump's Toledo fitness locations, although he owns businesses in Michigan as well.

Stump is the second businessman in recent weeks to face felony charges of failing to pay sales taxes. Toledo restaurateur Tom Cousino is being screened for the pretrial diversion program.

Mr. Cousino, 64, of Perrysburg was charged with one count each of grand theft and failure to remit Ohio sales taxes withheld, both fourth-degree felonies, for allegedly failing to pay a total of $80,915.91 in sales taxes - excluding penalties and interest - to the state of Ohio.

Had he been convicted on the charges, he could have faced up to three years in prison.

Last week, he withdrew his plea of not guilty to each count and asked to be screened for diversion. Judge McDonald referred him to the probation department to determine whether he is eligible and set a Sept. 28 hearing date.

Stump's attorney, Sheldon Wittenberg, noted that his client too would be eligible for the diversion program based on his lack of any prior criminal record. However, part of the program would require Stump to make full restitution in three years - about $16,000 per month - to be successful in the program, Mr. Spryszak said.

"Despite his lack of prior contacts with the court system, he was ultimately determined to be illegible for the diversion program," the attorney said, noting the significant restitution amount.

"Rather than delay the inevitable felony conviction that would have occurred [when he failed the program], we moved forward with this plea agreement."

Contact Erica Blake at:

eblake@theblade.com

or 419-213-2134.