Owners of Envy Nightclub charged with tax evasion

Friday, September 13, 2013

The owners of the Envy Nightclub in downtown Minneapolis made their first court appearance Thursday on tax evasion charges, Hennepin County Attorney Mike Freeman announced.

James Shelly Beamon (PDF), 39, and Susan Kerry Beamon (PDF), 45, both of Brooklyn Park, were each charged with 11 counts of filing false income tax returns, failing to file sales tax returns and failing to remit sales taxes. The next hearing for James Beamon was set for Oct. 14 and for Susan Beamon on Nov. 1.

“The Beamons’ had the audacity to claim last year that their club was being targeted because the city didn’t like their clientele,” Freeman said. “No, they were targeted because they were a wealthy couple who were not paying their income taxes and their business used two sets of books so they could pay less in sales taxes and pocket the difference. It’s criminal behavior. Furthermore, it’s not fair to other businesses that pay their sales tax and it is not fair to all the hardworking Minnesotans who pay their income taxes every year.”

According to the criminal complaint filed July 31, the Minneapolis Police Department’s License Division had received tips from employees last year that Envy management was “skimming” off of several cash only bars inside the nightclub, as well as from cover charges. The Minnesota Department of Revenue was brought into the investigation.

Revenue department records showed an adjusted gross income for the couple of negative $8,464 in 2009 and that was the last year for which they filed an income tax return. On Aug. 30, 2012, investigators executed a search warrant for the Envy Nightclub, 401 First Ave. N.

According to the complaint, among the records found was an accurate set of books that reported on each day’s total sales at the club. For April, May and June 2012, the records showed the club had sales of $328,182. However, in filings with the state for those three months, the Beamons reported sales of only $87,853 or a discrepancy of $240,329. Based on the accurate sales numbers, the nightclub should have paid an additional $33,468 in sales taxes.

James Beamon also opened three business savings accounts, which in 2011 and 2012 received deposits of nearly $100,000, the complaint states.

The Beamon’s were released without bail. The MnCIS number for their cases are 27CR1326030 and 27CR1326013.