Mario Saikhon, a prominent Imperial County vegetable grower, was indicted Tuesday on 22 counts alleging that he paid over $600,000 in bribes to an Internal Revenue Service agent and evading more than $10 million in taxes.
Saikhon used a "veritable cornucopia of methods" to evade taxes, including sham corporations, bogus bank accounts and unusual accounting practices in a case that makes Leona Helmsley's crimes pale in comparison, federal prosecutors said. Then, prosecutors said, he paid the hundreds of thousands of dollars in bribes to ensure that his tax returns were not reviewed from 1981 to 1990 by honest IRS examiners.
Calling the case one of the largest tax evasion schemes--and one that involved the highest bribe total--in the history of the IRS, prosecutors said it was no accident the indictment was issued the day before the annual tax filing deadline.
Even the "high and mighty" must pay up, just like "people on the low end," said Assistant U.S. Atty. Phillip L.B. Halpern, the prosecutor in the case.
Saikhon, 58, of El Centro, remained free Tuesday. He is due to surrender Thursday to authorities at the San Diego federal courthouse, Halpern said. If convicted on all 22 counts, Saikhon could draw up to 102 years in prison and millions of dollars in fines.
Saikhon was charged in U.S. District Court with one count of conspiracy, two of bribing a public official, five of tax evasion, six of filing false tax returns and eight of aiding the filing of false returns.
Calls Tuesday to Saikhon's office in Holtville were referred to his San Diego lawyer, Peter J. Hughes. The attorney said a plea bargain might be in the works.
"We've been talking to the U.S. attorney's office for a substantial period of time," Hughes said, aiming "to get some resolution to the case."
Halpern declined to comment on the possibility of a plea bargain. He stressed Tuesday that the scope of the case was "staggering," alleging that Saikhon owes over $10 million in back taxes on the more than $30 million in income. With penalties and late fees, that $10 million has skyrocketed to more than $20 million, Halpern said.
By comparison, Leona Helmsley, the New York hotel queen who was ordered Tuesday by an appeals court to begin serving a four-year prison term, was convicted of evading $1.7 million in taxes, Halpern said.
Saikhon's indictment had been hinted at for months. Last year, a former IRS agent and his accountant son pleaded guilty in San Diego federal court to felony charges that stemmed from what prosecutors called a complex scheme by Saikhon to evade taxes during the 1980s.
Robert Morales Sr., 62, a 30-year IRS employee, pleaded guilty to two felony counts and was sentenced to 12 years in prison. Robert Morales Jr., 28, who also pleaded guilty to two felony counts, was sentenced to 41 months in prison. Saikhon was not indicted with the father and son but prosecutors have consistently said their investigation of him was ongoing.
Prosecutors allege that the elder Morales single-handedly audited Saikhon's tax returns in exchange for $647,518 in bribes paid to cover up the tax records of cash paid to "ghost" employees, diverted to offshore banks or funneled to bogus firms set up by the IRS employee's son.
Meanwhile, prosecutors said, Saikhon claimed millions of dollars of false deductions--for personal expenses that were recorded on his books as legitimate business costs.
Between 1981 and 1990, Robert Morales Sr. controlled more than 20 of Saikhon's personal or corporate returns, the indictment said.
Saikhon runs one of the largest farming operations in Southern California. Between 1985 and 1989, according to the indictment returned Tuesday, his vegetable fields--lettuce, cantaloupe and a variety of other crops--grossed more than $130 million.
Saikhon also has extensive real-estate holdings, including shorefront properties in La Jolla, a house in El Centro and condominiums in Santa Barbara and Manhattan, Halpern said.