MO employee, local business owner plead guilty to fraud scheme

A Missouri Department of Revenue employee pleaded guilty yesterday to fraudulently refunding a Springfield business owner to the tune of $158,000, following the guilty plea last month of the local man.

Roselly Otto, 31, of Meta, pleaded guilty to federal information charging her with two counts of mail fraud. The Springfield business owner, James Bruhn, who operated a lawn care company known as EB Lawncare, pleaded guilty to his role in the scheme March 13, landing him with a count of mail fraud, according to a news release from the office of Tammy Dickinson, U.S. attorney for the Western District of Missouri.

Between April 2011 and September 2012, the pair evenly split $127,905 in proceeds from the scheme. Otto, who worked for the taxation division of the state department, also admitted she received roughly $30,000 in a separate, but similar, fraud scheme occurring from January 2009 to September 2012.

Through EB Lawncare, Bruhn submitted motor fuel refund claims to the taxation division. Motor fuel can be exempt from the state fuel tax for certain nonhighway purposes. As part of her role with the state, Otto was tasked with approving or declining motor fuel refund claims submitted to the division, the release said.

Bruhn admitted he knowingly submitted fraudulent refund documents, and Otto admitted to receiving the claims and approving them even though she knew the information was false. Otto caused refund checks to be mailed to Bruhn, and he would then cash the refund checks and mail a portion of the proceeds to Otto, according to their guilty pleas.

Under federal statutes, Otto could be subject to up to 40 years in prison without parole, a fine of up to $500,000 and an order of restitution. Bruhn could face up to 20 years in federal prison without parole, a fine of up to $250,000 and an order of restitution.

Sentencing hearings will be scheduled following presentence investigation by the U.S. Probation Office.

The case is being prosecuted by Assistant U.S. Attorney Patrick Carney and was investigated by the U.S. Postal Inspection Service and the Missouri Department of Revenue Compliance and Investigation Bureau.