The madam of a high-end prostitution business that allegedly catered to some of Denver's most famous and successful residents admits she's guilty of owing the IRS tens of thousands of dollars in unpaid taxes and of tax evasion.
Brenda Stewart, owner of Denver Sugar/Players changed her plea in federal court Wednesday afternoon from not guilty to guilty to one count of tax evasion. The government moved to dismiss the other 69 counts against her.
Last year, Stewart was indicted on 70 counts of tax evasion, using interstate commerce in aid of racketeering, witness tampering and money laundering. She used to be a prostitute for the escort business in 2004 using the name "Carter," and then bought Denver Sugar/Players from then-owner Scottie Ewing in May 2005 for $150,000 and paid him for it in monthly installments, according to the U.S. District Court indictment.
Ewing pleaded guilty to tax-related charges, was fined $70,000 and sentenced to home detention for his role in the brothel.
In 2008, 9Wants to Know reported that then-Chief U.S. District Court Judge Edward Nottingham was a client. He resigned after the information became public.
The grand jury charged Stewart with using the company Phoenix Media and Consulting as a front for the escort agency, and using it to hide income from the IRS. The indictment also says she failed to pay taxes and filed false tax returns during the years 2005, 2006 and 2007.
Stewart deposited up to $3,800 cash weekly in different bank accounts in Colorado, Mississippi, North Carolina and Ohio, according to court records.
Stewart charged customers $300 an hour if they paid cash and $350 per hour if they used credit cards. Stewart took one third of the money while prostitutes took two-thirds, according to prosecutors in court Wednesday.
Prosecutors also said Stewart used Hotmail and Yahoo.com accounts to book appointments.
Stewart will be sentenced in November. If convicted, she'll owe the IRS about $40,000 in back taxes and fines and faces up to five years in prison and/or restitution.
The 35-year-old did not answer questions by reporters as she left court Wednesday afternoon.
