BLOOMINGTON — One of five former management officials of the city-owned arena was sentenced to 30 months on probation Thursday for conspiracy to commit tax evasion.
Paul Grazar, 52, the former food and beverage director for the former U.S. Cellular Coliseum, agreed to plead guilty to the Class 3 felony in exchange to cooperate with authorities and possibly testify if necessary against other co-defendants.
Grazar and four co-defendants, were employed by Central Illinois Arena Management (CIAM).
He appeared Thursday afternoon before Associate Judge Michael Stroh.
Last year, two counts of money laundering were dismissed against Grazar because the three-year statute of limitations had expired. The conspiracy charge has a five-year statutory limit.
Assistant State’s Attorney Brad Rigdon told the court that Grazar did not financially benefit from a scheme to hide sales revenue from the city of Bloomington, which led to false tax returns being filed on behalf of the company. That plan, Rigdon said, was orchestrated by CIAM President John Y. Butler, who instructed Jay Laesch to remove cash from some beer and alcohol sales which did not go through a point of sale system.
Laesch was the former finance director of BMI Concessions, an organization founded under the direction of CIAM.
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“Sales from cash carts were logged by hand,” Rigdon said. “The cash carts were sent to a vault and then Laesch, under instructions from Butler, would enter the vault, and remove the cash. This would reduce sales reported to the city of Bloomington, which was entitled to commissions, which were never paid. ... It was also not reported on prepared tax returns.”
An investigation revealed that $102,571 was removed, which was used to finance the company. Rigdon added that, on one occasion, $12,000 was withdrawn and three employees, including Grazar, were given bonuses from that. The bonus previously had been promised to Grazar under his contract with CIAM.
“CIAM received the benefit, but not Paul Grazar,” Rigdon said. “His involvement was less than the others.”
Because Grazar knew and discussed the false reporting of sales to the state of Illinois on tax returns from 2013 to 2016, he was charged with conspiracy to commit tax fraud.
Defense lawyer Philip Finegan and Grazar accepted the plea but did not elaborate further during the 30-minute hearing. Grazar did not speak, except to answer the judge that he understood the charges and the plea. He must also pay a $75 fine, plus court costs.
Butler faces more than 40 criminal charges related to the 10 years CIAM supervised operations of the former arena, now known as Grossinger Motors Arena. The charges include theft of public funds, wire fraud, and tax-related offenses. A hearing on a motion to suppress evidence is scheduled for Aug. 27.
Previously, a judge dismissed theft charges against former general manager Bart Rogers and former assistant manager of finance Kelly Klein. A plea agreement was reached in November between the state and Laesch, who was sentenced to probation on charges of money laundering and filing a fraudulent sales tax return.
Contact Kevin Barlow at (309) 820-3238. Follow him on Twitter: @pg_barlow