Crime

Middleton bar owners plead guilty to cash skimming from video gambling machines, DOJ reports

Tax loss: $268,852

MIDDLETON, Wis. - Two Middleton bar owners pleaded guilty Thursday to skimming cash from video gambling machines, according to a news release from the Wisconsin Department of Justice. 

Dudley Hellenbrand, 67, and Cherie Hellenbrand, 45, have owned and operated Middleton Sport Bowl since 1997. The two contracted with a video gambling machine  vendor to have machines placed in their bar. 

The Hellenbrands split the profits with the vendor 75% to 25%, with them getting the majority. 

While the two were required to report and pay taxes on the profits as income on their state and federal income tax returns, investigators learned they skimmed the cash receipts and did not report the total income. 

The tax loss from the skim for both state and federal income taxes for the years 2010-2017 totaled $268,852, according to the release. 

The investigation, led by IRS criminal investigators, involved an undercover agent posing as a buyer. During a meeting, the Hellenbrands admitted that they were skimming the cash receipts from the VGMs. They said they stored they cash receipts at a safe in their home and used the cash to pay for various things, including a car, vacations, $40,000 in landscaping and cash wages for some employees. 

According to the release, one of the VGM vendors, Tom Laugen, told the undercover agent that he prepared false collection tickets that underreported the true gross receipts and profits generated from the VGMs, and said "you got to steal in this business or you ain't going to make any money."

Sentencing for both Hellenbrands will be in October. 

Editor's note: An earlier version of this article inaccurately attributed the quote to the Hellenbrands. The story has since been updated to correctly attribute the quote. 

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