Three Southern California men--including two Orange County residents--have pleaded guilty to charges they set up a tax fraud scheme revolving around phony invoices.
The fraud was carried out at two Montebello companies--Super K and J. K. Precision Machining Inc.--which were subcontractors to Rockwell International on the B-1 bomber in the mid-1980s.
Essentially, the companies' owner, Joseph Kasparoff, 55, of Encino, wrote company checks to two Orange County residents based on bogus invoices. Kasparoff deducted the payments as business expenses on his taxes even though the men returned the money to him.
At the same time, the government paid the two companies hundreds of thousands of dollars based on many of the phony invoices.
"They stole the money from the government through defense fraud, then laundered the money out of the company into their own pockets and then evaded taxes on that money," said Assistant U.S. Atty. Steven G. Madison.
Harold Geyer, 71, of Brea pleaded guilty Tuesday to conspiracy and two counts of tax evasion for writing the phony invoices and failing to file tax returns or pay taxes for three years. Geyer worked as a messenger for Kasparoff's companies.
Frank Calta, 40, of Orange, pleaded guilty last week to conspiracy for cashing about $1 million in checks made out to fictitious third parties and then returning the money to Kasparoff. Calta was a business acquaintance of Kasparoff.
Kasparoff pleaded guilty Tuesday to conspiracy, tax evasion and knowingly filing a false tax return. He faces up to 13 years in prison and $750,000 in fines.