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August 5, 2010

Strip Club Owner and Manager Arrested in $600,000 Tax Theft Case

The owner and manager of a Miami strip club have been arrested on charges that they stole sales tax they collected from customers but failed to send in to the state, the Florida Department of Revenue announced.

Karen Harr Raley, 66, Aventura and James Wright, Jr., 39, Miramar, were arrested by officers of the Miami Police Department and investigators from the Miami-Dade State Attorney’s Office on August 4, 2010 on felony charges relating to filing false tax returns and failure to pay tax. If convicted, each defendant faces up to 5 years in prison and up to $5,000 in fines for each of more than 30 felony counts, as well as possible repayment of stolen tax, interest, penalty and investigative costs in the operation of Buddy Bee Corp., doing business as Take One Lounge at 333 NE 79 Street, Miami, Florida.

According to Revenue Department investigators, the owners routinely collected tax from customers at the Take One Lounge. However, during various periods between July 2005 and August 2008, they failed to send in to the state all of the sales taxes that they had collected. The business failed to send in sales tax of more than $600,000. Under state law, sales tax is the property of the state at the moment of collection.

"Most Florida businesses do an excellent job of meeting the state's requirements for collecting and submitting sales tax, which pays for services Floridians need," said Lisa Echeverri, Executive Director, Florida Department of Revenue. "Individuals who collect tax but don't send it in are stealing taxpayer dollars and gaining an unfair financial advantage over honest businesses. It's our job to ensure that Florida's tax laws are administered fairly."

If you have information about tax crimes, please call the Florida Department of Revenue investigations office in Miami at 305-513-3290.