KAILUA-KONA — A former real estate broker could receive probation and serve no more than a year in jail after pleading guilty to theft and failure to pay taxes.
Shellie A. Grace, 40, pleaded guilty to one count first-degree theft, a Class B felony, and five misdemeanor counts of willful failure to file tax returns as part of a plea agreement during a Jan. 26 hearing before Kona Circuit Court Judge Melvin Fujino.
Grace, who also goes by Shellie A. Fujihara, will be sentenced by Fujino on March 31. During sentencing, Fujino will also consider a deferred acceptance of her guilty plea, which includes the provision that if all conditions of the sentence are met, the court shall later dismiss the charge against the defendant.
Grace, who operated the now defunct Elite Property Management Services, LLC., was indicted in October. In the 13-count indictment filed against her and her company, prosecutors alleged taxes were not paid from 2010-14, owners of the properties she was managing were not reimbursed and general excise taxes and/or transient accommodation taxes for some of the properties were not paid. The first-degree theft charge was included because the aggregate value of the property obtained by Grace exceeded $20,000.
The criminal investigation began in 2014, when rental property owners contacted the Hawaii Police Department about her business practices, according to a press release from the Hawaii County prosecuting attorney’s office. After determining there was possible tax crimes, the police sent the case to the state Department of Taxation, resulting in the indictment.
In exchange for the Kailua-Kona resident’s guilty pleas, prosecutors agreed to drop a felony charge of willful failure to collect and pay over tax filed against Grace, as well as five misdemeanor counts of willful failure to file tax returns and one felony count of willful failure to collect and pay over tax filed against Elite Property Management Services, LLC.
The state also agreed that it would recommend a probation term of four years and up to one year in jail for the felony theft charge. As for the misdemeanor tax charges, prosecutors will recommend Grace serve concurrently one year probation with no more than six months jail. The agreement also stipulates that if a pre-sentencing investigation determines a lesser amount of jail time, the state will concur with that finding.
Grace also agreed to pay restitution monthly to 13 named victims, as well as to “presently unnamed victims who are victims of the same conduct,” according to court documents. She must also file the back tax returns to the state for 2010-14.
Ricky Damerville, the prosecutor who handled Grace’s case, said this case isn’t the first of its kind, pointing to highly publicized case of Robert Marlowe Smith, who disappeared from West Hawaii in 2009 after notifying clients that he would be closing his business and dispersing funds; the latter of which did not occur. He was ultimately sentenced, after pleading guilty to first-degree theft, to four years probation and 18 months jail, with all but 12 months suspended.
“This particular type of offense is not uncommon,” said Damerville.
He later added, “Hopefully, when you do (take) one (to court), and it gets publicity, they (potential tax scofflaws) decide they’re not going to do it anymore because they don’t want to be indicted and they don’t want to go to jail.”
Grace’s attorney, John Robert Knoebber, declined to comment.
State records show the company was registered on Feb. 19, 2009, and has not completed annual filings for 2015 and 2016. Grace forfeited her real estate broker license when it expired Dec. 31, 2014, according to the Department of Commerce and Consumer Affairs.