Southern California Man Convicted of Tax Evasion and Lying to IRS After Fraudulently Applying for a Passport While Attempting to Flee
SANTA ANA, California – A former resident of Orange County who now lives in northern San Diego County has been found guilty of tax evasion and lying to the IRS after applying for a passport in a false name as he attempted to flee from the prosecution.
Louis Joseph Vadino, 75, currently of Ramona and formerly of Lake Forest, was convicted yesterday by a federal jury after a five-day trial. He had previously pleaded guilty to failing to appear for court, conspiracy, two counts of passport fraud, and two counts of aggravated identity theft.
From 2002 to 2006, the IRS was actively attempting to audit and assess Vadino’s taxes owed. Vadino had purchased five residential properties in Lake Forest between 1999 and 2002 under the name of a shell company. Vadino, his three adult daughters, and his mother resided in these homes. In the fall of 2006, Vadino directed his daughter to obtain refinance loans on three of the Lake Forest properties and sold a fourth Lake Forest property, resulting in $2.1 million in loan and sale proceeds being wire transferred to a bank account in Greece controlled by Vadino.
From 2006 to 2011, defendant took steps to evade his 1999 taxes, including concealing and attempting to conceal the nature and extent of his assets and the location thereof, lying to Special Agents of the IRS’s Criminal Investigation Division, placing funds and property in the names of others, and using offshore accounts to place funds and property beyond the reach of the IRS.
When scheduled to go to trial in the case, Vadino cut off his ankle bracelet and absconded. In October 2014, he applied for a U.S. passport using another person’s identity. Vadino was captured in December 2014 and has been in custody since then.
“This defendant went to great lengths to hide income from the IRS and to attempt to escape justice,” said United States Attorney Eileen M. Decker. “This case demonstrates the dedication of the IRS and the Department of Justice to ensuring that tax evaders face serious consequences for their actions.”
After the jury returned its verdicts, United States District Judge Andrew Guilford set Vadino’s sentencing for February 6, 2017, at which time Vadino will face a statutory maximum sentence of 44 years in prison and a mandatory minimum sentence of two years in prison.
“As the jury’s verdict shows, this was a well-hidden, but ultimately transparent scheme to defraud the United States government,” stated Acting Special Agent in Charge Anthony J. Orlando for IRS Criminal Investigation. “Mr. Vadino hid assets from the IRS by placing funds and property in the names of family members and shell corporations, and funneling loan proceeds from those properties to an offshore bank account. Using intricate schemes and offshore bank accounts to commit tax evasion is a dangerous shell game played by swindlers like Mr. Vadino. Unfortunately for them, they don’t realize the odds are heavily stacked against them.”
Steven Ness, 44, of Long Beach, was also charged in the case with counts related to assisting Vadino in his attempt to obtain the passport with Ness’s father’s identity. The case against Ness is pending.
The investigation into Vadino and Ness was conducted by IRS Criminal Investigation, and the case is being prosecuted by Assistant United States Attorneys Greg Staples and Daniel Ahn of the Santa Ana Branch.