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Press Release

Southern Oregon Couple Pleads Guilty to Fraud and Tax Charges

For Immediate Release
U.S. Attorney's Office, District of Oregon

MEDFORD, Ore. – Kenneth Johnson, 62 and Diana Arredondo, 56 pled guilty to federal charges stemming from their work at the Super 8 Hotel in Central Point, Oregon.  Johnson pled guilty to wire fraud and filing a false tax return.  Arredondo pled guilty to filing a false tax return.  The maximum penalty for wire fraud is 20 years imprisonment and a $1,000,000 fine.  The maximum penalty for filing a false tax return is 3 years imprisonment and $100,000 fine.  Johnson is scheduled to be sentenced Febuary 10, 2014, and Arredondo is scheduled to be sentenced on February 24, 2014, both before the Honorable Owen M. Panner in Medford, Oregon.

Johnson was a partner in the Super 8 Hotel in Central Point Oregon since it opened in October 2005.  He was in charge of the hotel’s daily operations and reported the financial figures to his co-parters in Montana.  Johnson hired his girlfriend, Arredondo, as the hotel manager.  They worked at the hotel from October 2005 through 2011.

Johnson defrauded his partners by providing them false information regarding the cash collected by the hotel.  The scheme diverted approximately $500,000 in cash and checks from the Super 8 Hotel in Central Point for Johnson’s personal use. 

In addition, Johnson and Arredondo each filed fraudulent income tax returns, knowingly underreporting the cash they took from the hotel.

The case is being prosecuted by Assistant U.S. Attorney Judith Harper.  The case was investigated by the Internal Revenue Service and Federal Bureau of Investigation.

Updated January 29, 2015