Game developer sentenced to jail for tax evasion
The video game developer behind "Street Fighter II: Hyper Fighting," "Alvin and the Chipmunks" and "Tiger Woods PGA Tour 2005" has been sentenced to six months in jail for tax evasion.
Third District Judge Robin Reese on Monday sentenced David M. Rushton, 55, of South Jordan, on charges of tax fraud and racketeering. The judge also ordered Rushton to pay $516,816 in restitution.
Rushton started the video game development company Fooptube LLC in 2005 and employed as many as 211 employees, according to the Utah Attorney General's Office, which prosecuted the case. The company, also known as Sensory Sweep Studio, developed games such as "Justice League Heroes," "Marvel Nemesis: Rise of the Imperfects" and "Jackass: The Game."
But Rushton failed to pay state taxes in 2006 and 2007 and filed bogus W-2 forms in 2008 that prompted fraudulent refunds, prosecutors said.
"Failing to pay taxes and filing fake tax returns is not a game," Attorney General Mark Shurtleff said in a statement.
Rushton pleaded guilty to a third-degree felony count of failing to file tax returns with an intent to evade and one second-degree felony count of engaging in a pattern of unlawful activity.
The sentence also includes 72 months probation, and Rushton is forbidden from handling money for other people. Rushton also is required to perform 200 hours of community service.
The case was investigated by the Utah Tax Commission.
Last month, the Department of Labor sued Rushton and Fooptube in federal court for failing to transfer about $240,000 withheld from employee pay checks to a deferred compensation plan.