LOS ANGELES — Convicted by a federal jury of tax evasion, Gilbert Fuentes was sentenced Monday to 30 days in prison after prosecutors said he took $200,000 in unreported income from a prominent Newport Beach businessman to keep quiet about an $11-million savings and loan fraud.
Fuentes, 59, faced a maximum sentence of five years in prison and $250,000 in fines. Instead--in addition to the 30 days--he was sentenced to five years of probation and 3,000 hours of community service by Chief U.S. District Judge Manuel Real.
Prosecutors said Fuentes took no part in the defrauding of Columbia Savings & Loan in Beverly Hills, which is now insolvent. Instead, they said, he got Michael E. Parker to pay him the $200,000 after telling Parker that he knew the Newport Beach businessman was paying kickbacks to a Columbia executive.
Parker, 43, a flamboyant entrepreneur, goes on trial Sept. 3 on 46 counts of defrauding the thrift. Also facing trial with Parker is Jeffrey S. Worthy, 33, of Downey, Columbia's former director of financial planning.
Prosecutors say Parker paid Worthy more than $1.5 million to overlook the phony or inflated investments that Parker was selling the thrift through his Parker North American Corp., a Costa Mesa company now in bankruptcy. The investments were leases arranged by Parker North American for financial institutions to lease office equipment.
Parker and Worthy have said repeatedly that they are innocent.
According to testimony and evidence at Fuentes' trial, he met Parker in the early 1980s when he was chief financial officer at Columbia. Fuentes was earning $300,000 a year at the thrift, which was brought down last year by heavy investments in high-yield, high-risk securities known as junk bonds. Worthy worked for Fuentes.
In 1985, though, Parker offered Fuentes a job that might pay up to $400,000 a year at one of Parker's companies. Fuentes took the job but ended up losing what he said was several million dollars, much of it by selling his Columbia stock at a loss to invest in a banana-importing business with Parker.
In 1986, after the two had a falling out, prosecutors said, Fuentes tried to get his money back from Parker. Fuentes wrote Parker an 11-page letter, according to Assistant U.S. Atty. James R. Asperger, intimating that Fuentes knew about the equipment-leasing scam. Federal prosecutors contend that Parker then paid Fuentes $200,000, half of the $400,000 that Fuentes asked for in the letter.
"After that, he never told anybody about what he knew," Asperger said. Still, Fuentes wasn't actually involved in the alleged thrift fraud, and he didn't overtly threaten to expose Parker in the letter--he merely mentioned that he knew Parker was bribing Worthy--so he was not charged with extortion or other crimes besides tax evasion, Asperger said.
Fuentes contended during the trial that the $200,000 was a settlement for emotional distress. Settlements for personal injuries are not taxable.
His lawyer, Chief Deputy Public Defender Dennis Landin, said Fuentes still maintains his innocence and may appeal.