|
2 contractors plead guilty to tax fraud The San Diego Union-Tribune February 27, 2004 Friday
Copyright 2004 The San Diego Union-Tribune
The San Diego Union-Tribune
February 27, 2004 Friday
SECTION: BUSINESS; Pg. C-3
LENGTH: 255 words
HEADLINE: 2 contractors plead guilty to tax fraud
BYLINE: Michael Kinsman, STAFF WRITER
BODY:
Two San Diego County
framing contractors pleaded guilty Wednesday to six felony tax fraud charges and have been ordered to pay $1.2 million in
restitution.
Robert Covington, 44, of Fallbrook and Donald Huffman,
62, of Del Mar also face prison terms of up to five years and eight months and probation of four years.
They are to be sentenced March 25 in San Diego Superior Court.
Deputy
District Attorney Ernie Marugg said the two men used a scheme to pay their workers in cash, avoiding payroll and workers'
compensation taxes.
Covington
and Huffman indirectly owned and operated
C&H Framing and participated with subcontractors James Joseph's Joseph and Sons Construction and Frederick Flores' Pacific
Landmark Framing in the scheme, according to prosecutors. The Franchise Tax Board said the cash payments were erroneously
listed as "cost of goods sold."
As a result, C&H Framing overstated
its expenses by more than $1.8 million in its 1999, 2000 and 2001 tax filings. Joseph and Flores also have pleaded guilty
to tax evasion charges and will be sentenced next month.
Covington and Huffman have paid restitution of more than $182,000 to the Franchise Tax Board and will pay an additional $1 million
to the state Employment Development Department and the State Compensation Insurance Fund within 90 days, according to the
Franchise Tax Board.
The two men pleaded guilty to state income
tax evasion, conspiracy to file false tax returns, payroll tax evasion and insurance fraud.
|
