Suburban Strip Club Owner Pleads Guilty to Tax Violations

Michael Wellek hid millions of dollars in a warehouse, filed false income tax returns

Friday, Nov 5, 2010  |  Updated 10:00 PM CDT
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A north suburban strip club owner who was accused of avoided taxes by hiding $12 million in cash in a warehouse pleaded guilty to the federal tax charges on Friday.

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A north suburban strip club owner who was accused of avoided taxes by hiding $12 million in cash in a warehouse pleaded guilty to the federal tax charges on Friday.

Michael G. Wellek, 63, of Libertyville was charged last month with one count of obstructing the IRS in collection of taxes and one count of filing a false income tax return.

His guilty plea Friday was a plea deal.  He'll serve a reduced sentence of about one and a half years in prison.  He's already paid the $5.5 million in restitution he owed to the government, the Chicago Tribune reported.

The sentence reduction comes with the stipulation that he provide "truthful testimony in any criminal, civil or administrative proceeding."

Wellek was the owner and operator of three "gentleman's" clubs: Heavenly Bodies in Elk Grove Village, Skybox in Harvey, and Cowboys in Markham.

Seven years ago, IRS agents seized about $12 million in cash -- stored in bags marked with the date and location where earned -- from a warehouse in Elk Grove Village where Wellek conducted business, authorities said. 

Prosecutors said Wellek failed to tell the IRS that from 1999 through 2003 that he routinely diverted cash from his businesses to the warehouse.

The charges also alleged that Wellek did not file personal income tax returns from 1989 through 1999 despite operating profitable businesses.  
 

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