September 5, 2002

MANHATTAN BEACH ‘PSYCHIC’ AND HER HUSBAND
PLEAD GUILTY TO CONSPIRACY TO DEFRAUD THE IRS

 A Manhattan Beach couple have pleaded guilty to conspiring to defraud the Internal Revenue Service by filing false tax returns that underreported their income by more than $750,000.
 Sonia Merino, 50, and her husband, Steve Merino, 44, pleaded guilty Wednesday afternoon in United States District Court in Los Angeles, admitting that they failed to report all of their income for the years 1995 through 1999.
 Sonia Merino owned and operated a business known as “Sonia Psychic Advisor.” Sonia Merino charged her clients fees for psychic services, including palm readings, tarot card readings, and meditation. Steve Merino managed the business for his wife.
 Beginning in 1995 and continuing through 2000, Sonia and Steve Merino defrauded the IRS by failing to report all of the income from Sonia Merino’s business. They concealed their income in several ways, including: asking Sonia Merino’s clients to pay with cash, gift certificates, and other goods; asking clients to write the word “loan” on checks even though the checks were, in reality, payments for services; and asking clients to make checks payable to other persons.   Both of the Merinos pleaded guilty pursuant to plea agreements. As part of Sonia Merino’s plea agreement, she agreed to pay $60,000 into a restitution fund which will be used to reimburse clients who were defrauded as part of the mail fraud that was charged in the original indictment. Additionally, Sonia and Steve Merino agreed that all of the proceeds from the sale of their house in Manhattan Beach should be used to pay the restitution due in this case, including approximately $316,427 to the Internal Revenue Service.
 United States District Judge Edward Rafeedie is scheduled to sentence the Merinos on November 18.
 This case is the product of an investigation by IRS-Criminal Investigation and the Manhattan Beach Police Department.

 Release No. 02-131

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