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Former Pima judge Keith Bee pleads guilty in tax fraud case

Former Pima County Justice of the Peace Keith Bee has pleaded guilty to one felony count of filing a false income tax return and must pay $343,000 in restitution and faces up to 10 months in prison.

The plea deal was signed Friday in U.S. District Court; Bee will be sentenced Nov. 9.

Bee, a former state legislator who became a justice of the peace in 2007, was indicted Sept. 5, 2018, on three counts of filing false statements on tax returns for his business, Bee Line Bus Transportation, and on one count of attempting to impede an investigation.

He abruptly retired two days after the indictment.

The deal dismisses the other counts at sentencing in exchange for a guilty plea to Making and Subscribing a False Income Tax Return.

Bee Line Bus Transportation has no connection to Bee Line Travel, a Green Valley business that has been in operation for more than 30 years.

According to the deal, Bee knowingly and willingly "caused to be made and filed on his behalf" a tax return that contained false information.

Under the deal, he faces "0 to 10 months" in prison, to be decided by district court, and must repay $214,414 in lost tax revenue for tax years 2011, 2012 and 2013, and interest of nearly $129,000, for a total of $343,133. He also faces a fine of up to $250,000.

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In the plea deal, Bee describes how he reduced his tax liability for three years by reducing his net profit through overstating his expenses in tax filings. He acknowledged using personal expenses and the depreciation of assets, "including payments for and the depreciation of automobiles that were not used in the ordinary course and scope of my business."

According to the 2018 indictment, the expenses included payments for sports cars, including six Ford Mustangs, two Corvettes and a Porsche.

Expenses also included "construction, renovation or improvement" to residential properties in Arizona and Washington state, including a custom garage for his cars, a pool and spa, landscaping and custom window treatments and concrete work, according to a court filing.

The indictment said Bee maintained the checking accounts in the name of Bee Line Tucson and used them to pay for the personal expenses. That information was turned over to his tax preparer. He also claimed several personal vehicles as business vehicles and failed to report a $178,000 capital gain for tax year 2011, according to documents.

The IRS began auditing Bee's returns in 2014. Bee provided vendor invoices when issued a summons, but "the documents Bee provided to the revenue agent do not match corresponding copies and information obtained from the vendors," according to the original indictment. It also said some information provided by Bee "had been removed in an effort to disguise" the payments for personal items. He also provided a loan document from Ford Motor Credit for a $65,259 Mustang GT 5.0 Roush that had incomplete information, which the court called an attempt to obstruct and impede.

Bee's attorney, Michael Piccarreta, at the time said Bee was "the victim of a very shoddy tax preparation and not carefully reviewing voluminous tax returns. He, like most people, when given a thick return, just signed it where he was told to sign."

In asking for a trial delay in December 2020, attorneys for Bee said the case involved going through 86,000 pages of disclosure and required consulting with accounting and tax experts. The trial was set for September 2021.

This report was first published by the Green Valley News.


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