Executive assistant Julie Ann Kam said she was happy when her boss, second-generation car dealer Alan Pflueger, told her in 2005 to prepare a company check for him to sign to pay for her corrective eye surgery.
She had been employed at the car dealership since 1994 and thought the check was a reward for her hard work. She said she didn’t know at the time that what she was doing was wrong.
What made it wrong was that Pflueger also instructed her to record the check and others to cover her car payments as company advertising expenses. Kam also didn’t report the payments as income.
U.S. District Judge Leslie E. Kobayashi sentenced Kam on Tuesday to one year of probation for tax fraud. She also ordered her to pay a $500 fine and perform 50 hours of community service.
Kam pleaded guilty last year to filing a false 2005 income tax return. She had reported that her income that year was $47,398.
She said she has since hired a certified public accountant to redo her tax returns and got a loan to pay the $2,199 in taxes and interest she owed the Internal Revenue Service.
Kobayashi sentenced Pflueger on Friday to 15 months in prison for failing to report as income hundreds of thousands of dollars his company paid for his personal expenses. She is scheduled to sentence company Chief Financial Officer Randall Ken Kurata next month for filing a false corporate tax return for deducting the payments as business expenses and Los Angeles Accountant Dennis Lawrence Duban in January for conspiracy and preparing a false income tax return for Pflueger.
A federal grand jury charged Pflueger, Kam, Kurata, Duban and Pflueger’s father, retired car dealer James Henry Pflueger, in 2010 with conspiracy to defraud the IRS and tax fraud. All of them, except for the senior Pflueger, pleaded guilty.
In January, Kobayashi found James Pflueger not guilty of criminal charges involving the payment of his personal expenses by the car dealerships and the sale of a commercial property in California. However, Kobayashi later determined that Pflueger’s tax returns for 2003 to 2006 underreported his income by $593,839.
