Dubuque Man Sentenced for Wire Fraud and Filing False Tax Returns

A former Controller of a Dubuque company, who embezzled more $360,000, was sentenced on Monday, May 11, 2015, to more than two years in federal prison.

Michael Schute, age 51, from Dubuque, Iowa, received the prison term after a February 6, 2015 guilty plea to one count of wire fraud and one count of filing false tax returns.

In a plea agreement and at the sentencing hearing, Schute admitted he embezzled more than $365,000 from a privately-owned company between 2008 until he was fired in April 2013.  Schute embezzled the money by writing checks on the company bank account to pay personal credit cards and other bills.  Schute then concealed this conduct by falsifying the company books to make it appear the funds were expended on company debts.  When filing his tax returns for the tax years 2008 through 2013, Schute falsely concealed the funds he received from the embezzlement for his own personal use.  Illegal income is taxable.  Schute owes more than $86,000 in taxes on the illegal income.

Schute was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade.  Schute was sentenced to 33 months’ imprisonment.  A special assessment of $200 was imposed, and he was ordered to make $306,848.56 in restitution to the company and its insurance company (Schute had previously paid back more than $56,000 in restitution to the victim company).  Schute must also serve a three-year term of supervised release after the prison term.  There is no parole in the federal system.  Schute was released on the bond previously set and is to surrender to the Bureau of Prisons on a date yet to be set.

The case was prosecuted by Assistant United States Attorney C.J. Williams and investigated by the Internal Revenue Service and the Dubuque Police Department.

Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.  The case file number is 15-CR-1003.

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