June 26, 2007
Lebanon, Mo. — Michael G. Schlup, the developer of luxury condominiums at the Lake of the Ozarks, today pleaded guilty to 14 criminal charges that he failed to withhold taxes from his construction workers (many of whom were undocumented workers) or remit those payroll taxes and file the appropriate return with the state of Missouri.
Attorney General Jay Nixon and Camden County Prosecuting Attorney Jim Icenogle brought the charges in April 2006 against Schlup, who is from Leawood, Kan. Schlup’s businesses, Schlup Investments Inc. and Plaza Gardens on the Lake Inc. were involved in the construction of the Plaza Gardens on the Lake condominium complex located near Sunrise Beach.
“This prosecution and the plea that resulted from it should send a strong message that we won’t tolerate this type of conduct, motivated by greed, that allows unscrupulous employers to gain an advantage over those businesses that play by the rules,” Nixon said.
Schlup is scheduled to be sentenced Oct 17, 2007. Under the terms of the plea, the state is recommending that Schlup receive concurrent sentences of five years in prison on each of the fourteen counts, be ordered to pay the maximum fine on each count totaling $140,000 and be ordered to pay $24,873.36 in costs. In addition, Schlup is required to pay all applicable state and federal taxes and penalties prior to sentencing. If those taxes and penalties are paid, the state will recommend that execution of the prison term be suspended. Schlup would also be barred from conducting business in the state of Missouri after he completes his current projects.
Nixon’s office began its investigation after learning of reports of one worker death and several serious worker injuries at the Plaza Gardens construction site. Nixon said his office had reason to believe that as many as 30 undocumented workers may have been working at the site at any one time. The charges alleged Schlup paid his workers in cash and deducted no withholdings from the wages. Employees at the site worked 70 hours a week and the undocumented workers were paid approximately $8 an hour.