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Justice News

Department of Justice
U.S. Attorney’s Office
Northern District of California

Wednesday, September 17, 2014

Owner Of Monterey Wine Cellar Sentenced To Prison For Failure To Pay Wine Excise Tax

SAN JOSE – Brenda Jo Kibbee, was sentenced yesterday to nine months’ imprisonment for intentionally failing to pay Federal excise tax on wine, and ordered to pay $877,126.94 in restitution to the Alcohol and Tobacco Tax and Trade Bureau (TTB), announced United States Attorney Melinda Haag, TTB Assistant Administrator for Field Operations Tom Crone, and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez.

On Dec. 17, 2013, Kibbee pleaded guilty to one count of failing to pay an excise tax on wine. According to the plea agreement, Kibbee owned and operated Monterey Wine Services, a bonded wine cellar located in Monterey County, Calif. For each of the reporting periods from Aug. 1, 2008, through at least May 31, 2009, Monterey Wine Services had taxable removals of wine from its bonded wine cellar, which resulted in a wine excise tax due and owing to TTB. Kibbee failed to pay the excise tax due for each of these periods. In the wine warehousing industry, bonded wine cellars pay wine excise tax on the removal of wine, but then typically pass this cost on to their winery customers. Even though Kibbee did not pay the excise tax due to TTB, she invoiced her customers and received payments from them for the excise taxes. Kibbee agreed that the tax loss resulting from her misconduct was at least $877,126.94.

TTB Assistant Administrator for Field Operations Tom Crone said, “Tax evasion is not a victimless crime. Law abiding businesses rely on us to ensure a level playing field. We take that responsibility seriously.”

Kibbee, 41 of Salinas, Calif., was indicted on Sept. 26, 2012, on 11 counts of failing to pay an excise tax on wine. She pleaded guilty to one count.

The sentence was handed down by the Honorable D. Lowell Jensen, United States District Court Judge, in San Jose. Judge Jensen also sentenced Kibbee to a three-year term of supervised release. Kibbee was ordered to surrender on December 16, 2014.

Matthew J. Kluge, Trial Attorney with the United States Department of Justice, and Thomas Moore, Assistant United States Attorney for the Northern District of California, are prosecuting the case. The prosecution is the result of an investigation by the TTB, and the IRS, Criminal Investigation.

(Kibbee indictment )



Updated November 18, 2014