A California accountant described as the architect of a tax evasion scheme involving second-generation Hawaii car dealer Alan Pflueger was sentenced Thursday to two years in federal prison.
Dennis Lawrence Duban, 63, of Los Angeles was also fined $30,000 by U.S. District Judge Leslie E. Kobayashi for cheating the state and federal tax system out of $2.6 million.
"You betrayed a position of trust," Kobayashi said during the sentencing hearing in Honolulu. "You were pivotal in making these offenses possible."
Assistant U.S. Attorney Leslie Osborne Jr. said Duban’s actions deprived the public of more than $2 million.
"Mr. Duban was the architect of the scheme," Osborne said. "He is an accountant. He has a moral and ethical responsibility … and he abandoned that responsibility."
Duban, who pleaded guilty in 2012 to conspiracy to defraud the Internal Revenue Service and assisting in preparation of a false income tax return, was the last to be adjudicated in a case involving five people indicted by a federal grand jury in 2010 on tax charges.
Three of Duban’s co-defendants — Alan Pflueger, Randall Kurata and Julie Ann Kam — previously pleaded guilty. Car dealer James Pflueger was exonerated of all charges against him.
In October, James Pflueger’s son Alan, whose full name is Charles Alan Pflueger, was sentenced to 15 months in prison and fined $40,000, after pleading guilty to filing a false 2005 income tax return and failing to report as income hundreds of thousands of dollars his company paid for his personal expenses.
Kobayashi said she recognized that Alan Pflueger did not start the practice, but walked into an existing culture when he took over the dealership from his father in 2002.
Kurata, chief financial officer of Pflueger Inc., was sentenced to five years’ probation and ordered to pay a fine of $40,000. Kam, an executive assistant for the company, was sentenced to one year of probation for failing to report as income money the company paid for her corrective eye surgery and car payments.
Several of Duban’s associates and friends had flown in from California to support him at his sentencing in federal court.
Dione Washington, director of the foster care program at Los Angeles Trade Technical College, testified that Duban had helped to raise $100,000 to support students on the brink of living on Skid Row.
Duban apologized for his actions and promised it would "never, ever happen again."
Kobayashi said while she recognized that Duban was remorseful and has done good deeds in his community in Los Angeles, she also had to be consistent in sentencing.