Police investigate alleged embezzlement scheme | AspenTimes.com

Police investigate alleged embezzlement scheme

Snowmass Village police are investigating a possible embezzlement case that insiders say could be one of the most complicated and costly in a recent rash of similar crimes in the upper valley.

Sources familiar with the investigation, including law enforcement officials, said a Snowmass Village business services firm and its operator may have embezzled at least $500,000 from 15 clients. The alleged victims include restaurants in Snowmass Village.

Snowmass Village Police Chief Art Smythe confirmed Friday that his department has “initiated an embezzlement investigation” based on reports made Thursday by more than one business. Smythe said he could not discuss the alleged number of victims, dollar amounts involved or the suspect because he doesn’t want to jeopardize an investigation.

“It’s definitely a significant situation,” Smythe said.

No arrest has been made in the case and extensive investigation of the allegations will be required, he stressed. Alleged victims compared notes One of the alleged victims is Floyd Watkins and his Beaver Run Ranch. Watkins told The Aspen Times he contracted with the Snowmass Village business services firm to handle his tax payments and employee payroll.

“I’m one that [was] nicked for quite a bit of money,” said Watkins.

He claimed that at least some of his ranch’s tax payments haven’t been forwarded by the alleged embezzler to the Internal Revenue Service since 1996.

Watkins said that after examining his books, he determined at least $8,000 in tax payments weren’t made to the IRS over a six-month period. In addition, unauthorized checks were allegedly written on his payroll account, Watkins said.

Representatives of about 15 businesses that contracted with the same firm met Thursday morning to discuss their situation.

Many reported that they kept getting notices for late tax payments, but were told by the owner of the business services firm that the IRS was just confused. The operator allegedly assured the clients that the tax payments were being made.

Watkins claimed the clients eventually learned they lost an estimated $80,000 to $100,000 each.

A law enforcement official, who asked not to be named, said that one Snowmass Village restaurant had allegedly suffered losses of $85,000 in the case.

Watkins claimed the losses could put some of the alleged victims out of business.

“It’s not going to break me, but it’s going to break some of these companies,” he said. Victims fear consequences Because the alleged embezzled funds involve tax payments, victims could receive a double or even triple whammy. First, they lost the funds that were allegedly embezzled. Now, the IRS is demanding payment of those funds, plus it’s assessing penalties, according to Watkins.

“I was told it was discovered through the IRS,” said Watkins. He said most of the business representatives gathered Thursday said they have talked to the tax agency to see how their cases will be handled.

They found that even if the alleged criminal activities prove to be true, the businesses are responsible for the tax payments, Watkins said.

Watkins said he recovered his records from the business services firm and even talked to the operator at the end of last week.

Police weren’t invited to the gathering of the alleged victims Thursday morning, but some of the business operators have talked to investigators since, Smythe said.

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