POSTED: 2:28 p.m. HST, Sep 15, 2010
LAST UPDATED: 4:39 p.m. HST, Sep 15, 2010
A federal grand jury today indicted four Hawaii residents and a California man on charges of tax fraud.
Named as defendants were Hawaii auto dealer Charles Alan Pflueger, his father, James Henry Pflueger, Randall Ken Kurata and Julie Ann Kam of Hawaii, and Dennis Larence Duban of California.
Florence Nakakuni, U.S. Attorney for Hawaii, said in a news release that Charles and James Pflueger claimed personal expenses as tax-deductible business expenses to Pflueger Inc.
Charles Alan Pflueger is the owner of Pflueger Inc. and James Pflueger is its former owner, the news release said.
Charles and James Pflueger were charged with filing false individual federal tax returns for three and two years, respectively.
Kurata, identified in the indictment as chief financial officer of Pflueger Inc., was charged with filing a false corporate tax return on behalf of Pflueger Inc.
Kam, identified as an executive assistant to Charles Pflueger, was charged with filing false individual tax returns for two years.
The indictment also says Charles Pflueger and Kam had additional personal expenses paid by another company owned by Pflueger, Pacific Auto Distributors.
James Pflueger and Duban, an accountant, were named in a separate charge that they obstructed the Internal Revenue Service in its collection of taxes on Pflueger’s sale of property in California. The proceeds were sent to a bank account in Switzerland, the U.S. Department of Justice said, and the defendants failed to disclose to the federal government the existence of that bank account.
James Pflueger still has a pending manslaughter case unrelated to the tax case over the deaths of seven people when the Kaloko Dam breached and sent 400 million gallons of water downstream on Kauai’s North Shore in March 2006.
Pflueger owned the land that includes the Kaloko Dam and Reservoir.
The case is on hold while Pflueger’s attorneys appeal a decision by Kauai Circuit Judge Randal Valenciano who refused in January to dismiss the manslaughter charges.
The appeal is pending before the Intermediate Court of Appeals. A decision isn’t expected for weeks, if not months.
State prosecutors have argued that Pflueger’s actions in covering the dam’s spillway led to the dam breaking and the loss of lives and property damage.
Pflueger’s lawyers have contended that 42 days of heavy rains were among the reasons for the dam breach. They maintain that covering the spillway did not cause the breach.