| FOR IMMEDIATE RELEASE May 15, 2009 WWW.USDOJ.GOV/USAO/CAN |
SAN FRANCISCO – Luke D. Brugnara pleaded guilty in federal court today to filing a false tax return, United States Attorney Joseph P. Russoniello and Special Agent in Charge, IRS Criminal Investigation, Scott O’Briant announced.
In pleading guilty, Brugnara admitted that he has been the sole-shareholder and owner of Brugnara Corporation since 1994 and is in the business of acquiring and renting real property in the San Francisco area and elsewhere.
In February 1998, the IRS requested copies of Brugnara’s individual income tax returns for 1990-1996, in addition to copies of tax returns for Brugnara Corporation. Brugnara returned those notices to the IRS with a notation indicating that the tax returns were already filed. At approximately the same time, Brugnara applied for a gaming license to operate a casino after acquiring the Silver City Casino in Las Vegas.
In March 2000, the Nevada Gaming Control Board began an investigation as part of Brugnara’s application for a Nevada gaming license. The background investigation included an inspection of his federal and state tax filings. During the background check, the investigators were told by the IRS that Brugnara had not filed tax returns for 1991-1998.
Brugnara further admitted that in January 2000, he sold two real properties in San Francisco and did not list the sales of these properties on his 2000 federal income tax return that was filed with the Internal Revenue Service, which he knew he was required to provide on the Form 1040 for 2000.
As part of the plea agreement, Brugnara agreed to an imprisonment term of between 18 and 24 months. He also agreed to pay a fine of $30,000 and restitution of $343,038.
Brugnara, 45, of San Francisco, was charged on April 3, 2008 with three counts of filing a false tax return in violation of Title 26 U.S.C. § 7206(1). The indictment charges Brugnara with failing to report capital gains on the sale of four properties in San Francisco, and one in Las Vegas. For the tax years 2000, 2001 and 2002, Brugnara failed to report capital gains that totaled approximately $45,663,402.
The sentencing of Brugnara is scheduled for August 18 before United States District Judge Willaim Alsup in San Francisco. The maximum statutory penalty for each count of filing a false tax return in violation of Title 26 U.S.C. § 7206(1) is three years in prison and a fine of $250,000, plus restitution, if applicable. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Thomas M. Newman is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Kathy Tat. The prosecution is the result of an investigation by lead IRS Criminal Investigation Special Agent Steve Martins.
Further Information:
Case: 3:08-CR-222-WHA
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