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Pflueger found not guilty of all charges in tax fraud case

By Nelson Daranciang

POSTED:
LAST UPDATED: 02:07 a.m. HST, Mar 21, 2013


A federal judge found retired car dealer James Henry Pflueger not guilty Wednesday morning of tax fraud and related conspiracy charges of lying about his income on his tax returns.

U.S. District Judge Leslie E. Kobayashi found Pflueger, 87, not guilty on all four charges, including failing to report as income money the Pflueger car dealerships paid for his personal expenses. He was also charged with underreporting the capital gain he realized on the 2007 sale of a commercial property in San Diego for $27.5 million. Pflueger was also faced charges involving his personal expenses and relating to the sale of the San Diego property.

Kobayashi presided over a nine-day, non-jury trial last month, and rendered her verdict this morning.

Pflueger’s Los Angeles accountant Dennis Lawrence Duban testified that he falsified Pflueger’s tax return and documents regarding the sale of the San Diego property because the retired car dealer needed money for his legal expenses related the Ka Loko dam disaster.

Pflueger faces manslaughter charges in connection with the 2006 deaths of seven people who were swept away in their homes by hundreds of millions of gallons of water that breached the Ka Loko dam on Kauai’s North Shore.

But a court hearing on Kauai is scheduled for April 18 on a proposed plea agreement.

Honolulu attorney William McCorriston, who represents Pflueger in the Ka Loko criminal case and who was in the courtroom for Kobayashi’s ruling, said he could not comment on the agreement.

“I’m just delighted that Mr. Pflueger was found innocent of all charges in this matter,” McCorriston said. “The court’s conclusion was definitely justified by the evidence in the case.”

A defense tax expert had testified that in his opinion, Duban falsified the tax return and sale documents because he had promised Pflueger a certain return on the sale and needed to make up the difference when the sales price came in lower than expected.

A defense handwriting expert testified that the signatures on Pflueger’s tax return and phoney sales agreement for the San Diego property do not match the samples he obtained from the retired car dealer.

Pflueger did not testify in his own trial.

His Beverly Hills, Calif., lawyer Steven Toscher argued that any errors or fraud that benefited Pflueger were committed by others, including Duban, without Pflueger’s knowledge. He said the tax loss from Pflueger failing to report as income his personal expenses paid by the car dealerships is no more than $30,000.

An IRS auditor testified that Pflueger failed to report income of more than $3 million in 2003-2007 and that he owes the federal government, Hawaii and California $1.8 million in taxes.

Four other people charged in 2010 with Pflueger have pleaded guilty and are awaiting sentencing.

Duban pleaded guilty to preparing the false income tax return that underreported Pflueger’s capital gain on the sale of the San Diego property and to helping Pflueger’s son, Charles Alan Pflueger, who took over running the car dealerships in 2002, prepare a false income tax return that failed to report as income personal expenses the company paid for him.

Alan Pflueger and his secretary Julie Ann Kam pleaded guilty to filing false income tax returns for failing to report as income money the car dealerships paid for their personal expenses.

Company chief financial officer Randall Ken Kurata pleaded guilty to filing a false corporate tax return that listed the personal expenses the company paid for Alan Pflueger as business deductions.

———

Star-Advertiser reporter Ken Kobayashi contributed to this report.







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cojef wrote:
Seems strange that his CPA testified on behalf of the Government and yet he is exonerated of charges. Not even a teeny bit?
on March 20,2013 | 09:28AM
Changalang wrote:
This comment has been deleted.
on March 20,2013 | 03:28PM
HaoleGuy wrote:
Hang is right! Hang him high!
on March 20,2013 | 10:19PM
allie wrote:
Big bucks attorney. Justice for the rich and justice for the poor are totally different in this country
on March 20,2013 | 09:48AM
kalai wrote:
then move to another country.
on March 20,2013 | 10:54AM
stingray65 wrote:
Maybe North Korea?
on March 20,2013 | 11:26AM
RichardCory wrote:
Or maybe the guy really wasn't guilty and the attorney didn't matter? It's like everyone who pays for expensive attorneys walks.
on March 20,2013 | 05:23PM
mcc wrote:
Another judge is bought by old money, such a shame. Phe still ulger is a criminal but is rich so he is not going to jail for what you and I would serve years for. He hasn't even settled with the familes whose relatives he killed.
on March 20,2013 | 09:48AM
kailuabred wrote:
Didn't realize you attended every day of testamony. You must be brilliant.
on March 20,2013 | 03:27PM
Hilofrank wrote:
When people think that the outcome of judicial proceedings are based on the wealth of the respective parties, then our entire system of justice fails and we begen to descend into anarchy.
on March 20,2013 | 10:33AM
markat wrote:
Please fasten your seatbelts as we begin our descent.
on March 20,2013 | 11:01AM
serious wrote:
OJ????
on March 20,2013 | 11:34AM
allie wrote:
continue our descent hon...
on March 20,2013 | 01:20PM
CloudForest wrote:
The IRS needs to be defunded and disbanded because it is wicked to the American population and is un-American in every possible aspect. It is the method that those in power keep their power and control of everyone and everything - communistas all.
on March 20,2013 | 11:00AM
kailuabred wrote:
You poor thing
on March 20,2013 | 03:27PM
CloudForest wrote:
Take what isn't yours and then belittle anyone who pays your way and vote for those who aid your thefts.
on March 20,2013 | 09:20PM
Sully77 wrote:
the families of judge kobayashi are going to get new Hondas from Mr.Pflueger. new cars for everybody!!!! lol
on March 20,2013 | 11:03AM
turbolink wrote:
Didn't son Alan do a plea deal that included testimony against his dad? Bet that will make for some laughter at the Thanksgiving table this year. Let's hope for justice for the seven Ka Loko victims and their families.
on March 20,2013 | 11:23AM
allie wrote:
yup
on March 20,2013 | 11:43AM
Mythman wrote:
Gotta love it when evidence rules and not biases and hype -
on March 20,2013 | 11:28AM
cojef wrote:
Somebody got to be the fall guy, guess who. The CPA who admitted he doctored the documents and falisfied the amounts. The question still remains, did he profit, by how much and what is owing if anything. Should be some long term gains for selling the property in San Diego??
on March 20,2013 | 12:10PM
iwanaknow wrote:
Sounds like the CPA deserves a Honda (after he gets out of jail?)
on March 20,2013 | 12:37PM
lowtone123 wrote:
All these people around guilty of filing false tax returns on his behalf and he knew nothing about it? Come on. I was born at night, but not last night.
on March 20,2013 | 12:23PM
iwanaknow wrote:
Remember, the 1 per cent live different than the 99%.
on March 20,2013 | 12:38PM
noheawilli wrote:
Yea defund the IRS they are a motley crew whom I hope to have only the minimal payout theft annually. I sure hope at 87 I am alive and NOT dealing with that agency. Just curious...since these charges were decided to be false, who pays the gentleman s legal fees? Shouldn't the erroneous accusers pay?
on March 20,2013 | 12:41PM
Slow wrote:
Maybe a canny old wheeler and dealer had no idea what those sleazy accountants were doing with his wealth. Four others in his scam plead guilty. But befuuddled, easily duped Jimmy didn't have a clue. Well Jimmy, in the court of public opinion, you are a slimy. lying, greedy destroyer of our land and our people. In my humble opinion.
on March 20,2013 | 01:01PM
allie wrote:
agree..he is a slime ball.
on March 20,2013 | 01:20PM
kailuabred wrote:
as are you
on March 20,2013 | 03:29PM
Slow wrote:
Thank you for your immature name-calling. It lifts the commentary to a higher level.
on March 21,2013 | 07:02AM
Wahiawamauka wrote:
Plea agreement on the Ka Loko dam manslaughter case?? Seven years later?? Disgraceful.
on March 20,2013 | 01:58PM
mcc wrote:
$$$$$$$$$
on March 20,2013 | 02:19PM
Poipounder808 wrote:
Come on Nelson, proof read before posting your story.
on March 20,2013 | 04:45PM
aaronkwills wrote:
It is better to be Rich and Guilty, Than it is to be poor and Innocent. Money wins again, this doesn't mean he didn't do it, it just means it wasn't proven my the prosecutor! Now he has the death at Koloko dam to worry about. Good luck, 7 lives lost!
on March 20,2013 | 07:01PM
HonoluluHawaii wrote:
Tell the truth to avoid a trial.
on March 20,2013 | 08:18PM
CloudForest wrote:
70,000 pages of tax codes = impossible to comply and everyone can be declared a felon at any time they need to be controlled or made an example of to herd the masses.
on March 20,2013 | 09:22PM
false wrote:
Ka Loko was an unanticipated accident. An act of god if you will. It was unfortunate but it wasn't JP's fault. And he should not be extorted or villified just because he has more wealth than most.
on March 20,2013 | 10:13PM
Slow wrote:
Was the Kaloko dam spillway, the dam safety valve, filled? Who ordered it? The rain was an act of god. The dam safety compromise was a deliberate act with terrible, consequences. That the deaths were unanticipated is not relevant. I am not an attorney but couldn't it be the difference between murder and manslaughter? If negligence causes multiple deaths it shouldn't be brushed off. Got to go now. Pflueger Honda is having their Honest Family Values Sale. Once a customer, always a friend. Jimmy will visit your gravesite. He's just that kind of guy.
on March 21,2013 | 06:31AM
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