HONOLULU – Hawaii auto dealer Charles Alan Pflueger is scheduled to spend the next 15 months in federal prison, beginning January 6, court records show.
The prominent auto dealer, who heads Pacific Honda (formerly Pflueger Honda), was sentenced on federal tax fraud charges on October 11. He also must pay a $40,000 fine, $26,000 in unpaid taxes, and perform 200 hours of community service.
The IRS claimed Alan Pflueger owed up to $1 million in taxes.
Alan Pflueger said the day of his sentencing: “It’s been a tough day for my family and I. It feels good to take responsibility for the mistakes that I’ve made and I’m looking forward to doing good things. And I’m thankful for all the people that supported me.”
On September 5, 2010, both Alan Pflueger and his father, James Pflueger, who founded the Pflueger dealership, were indicted on charges of “conspiracy to defraud the United States for the purpose of obstructing the Internal Revenue Service in its collection of taxes.”
Also charged were two Pflueger employees, Julie Ann Kam and Randall Ken Kurata, and the personal and business for both Pfluegers, Dennis Duban of Los Angeles, CA.
Alan Pflueger pleaded guilty to filing a false 2005 income tax return, “knowing it was materially false in that it failed to report taxable income.”
Kurata, an employee of Alan Pflueger as chief financial officer of Pflueger Inc., pleaded guilty to filing a false corporate income tax return for 2003. Under the plea deal, additional counts were dismissed, but Alan Pflueger and Kurata agreed to cooperate in the prosecution of others charged in the case.
Alan Pflueger directly implicated Duban in wrongdoing in his plea deal, alleging that Duban helped arrange the use of a Pflueger company to pay personal expenses of James and Alan Pflueger.
Duban pleaded guilty in October 2012 to conspiring to defraud the IRS and to assisting in the filing of a false tax return.
Alan Pflueger also filed a civil lawsuit against Duban in August 2013 over the federal tax filings that led to his indictment.
The original criminal indictment alleged that personal expenses were deducted as business expenses on the Pflueger, Inc. corporate tax returns, which were signed by Kurata. The indictment stated additional personal expenses of Alan Pflueger, as well as Kam, were paid for by Pacific Auto Distributors, a company owned by Charles Alan Pflueger.
The U.S. Attorney added charges for James Pflueger and Duban in connection with James Pflueger’s sale of a property in California. The U.S. Attorney said an estimated $14 million in proceeds “were sent to a bank account located in Switzerland” and that James Pflueger failed to disclose the existence of the foreign bank account to the IRS.
After successfully blaming Duban for his accounting troubles, James Pflueger was acquitted of the criminal charges against him on March 20, 2013.
U.S. District Court Judge Leslie Kobayashi said the government did not prove James Pflueger intentionally conspired to conceal profits he earned on the California land deal from the IRS.
Before Tax Fraud Charges, Father Fights Manslaughter, Reckless Endangerment Charges
James Pflueger is the same person who also was charged by the state of Hawaii in Nov. 2008 with 7 counts of manslaughter and one count of reckless endangerment for causing the deaths of 7 people when his Ka Loko Dam breached on March 14, 2006.
The state attorney general said Pflueger intentionally covered the dam’s main safety feature, its spillway, without proper permits or authorization, which led to the dam breach.
Bruce and Cyndee Fehring lost their daughter Aurora Solveig Fehring, son-in-law Alan Gareth Dingwall, and 2-year-old grandson, Rowan Grey Makana Fehring-Dingwall, before sunup on March 14, 2006, when the raging water filled with debris smashed into the their 6-acre property.
Christina Michelle McNees, who was 7 months pregnant, and Daniel Jay Arroyo, her fiancé, who she was set to marry just hours later; Timothy Wendell Noonan, Jr., a friend who Aurora invited to stay with them after he lost his home; and Wayne Carl Rotstein, the Fehring’s caretaker and business partner, were also staying on the Fehrings’ property and were killed.
James Pflueger fought the charges for more than 6 years, spending millions of dollars to delay and challenge the criminal case in court.
Under a plea deal with the state attorney general negotiated in 2013, James Pflueger pleaded “no contest” to one count of reckless endangerment in the first degree.
His company, Pacific 808 Properties LP, pleaded guilty to 7 counts of manslaughter and will pay a fine of $50,000 to the state for each person killed for a total of $350,000.
James Pflueger’s sentencing for the criminal charge of reckless endangerment in the first degree is scheduled for January 23 at 10 a.m. in Kauai’s Fifth Circuit Court.
“10-time convicted felon”
Should the sentencing go forward as scheduled, this will be James Pflueger’s second conviction.
In 2006, just 4 days before the Ka Loko Dam breach, James Pflueger pleaded guilty to 10 felony counts related to his illegal grading at Pilaa, a 393-acre property he owns near Ka Loko.
The illegal grading, which left 100 acres of red dirt exposed, caused a catastrophic mudslide on November 26, 2001, destroying a rare coral reef and polluting a pristine bay at Pilaa.
A heavy rainstorm that night in November 2001 pushed 1,000 tons of mud and debris into the once sparkling ocean, causing more than $100 million damage to the 20-acres of the reef that was awaiting the same federal protection that Oahu’s Hanauma Bay enjoys.
The Marvin family, who lived on the edge of Pilaa Bay, was able to flee the mudslide in time to escape injury, but their homes and cars were swamped in mud.
After a joint investigation by the Kauai County, state Department of Health and the U.S. Environmental Protection Agency, Pflueger was charged with 13 felony counts and pled guilty to 10 counts in 2006. He was fined $12 million in restitution and fees.
The EPA portion of the fine – $7.5 million – was the largest penalty against an individual polluter in U.S. history.
The state Board of Land and Natural Resources also fined Pflueger’s company Pilaa 400 LLC, the listed property owner, $4 million for the impact Pflueger’s illegal grading had on conservation land.
State Attorney General Mark Bennett headed Pflueger’s prosecution in both the Pilaa pollution case and the Ka Loko manslaughter case, but was replaced as is customary when a new governor was elected in 2010. It was the new attorney general, David Louie, who offered Pflueger a deal that some say let him walk away without consequences in the Ka Loko Dam criminal case.
“I wish Mr. Pflueger no ill will. I know he is going to die and meet his maker and get his ‘come up,’ said Bruce Fehring. “But this is about more than that. This is a signal to all wealthy and powerful people here in Hawaii that they can do what ever they want and buy their way out of it; that the wealthy and powerful in Hawaii can escape prison, even if prison is warranted, and that they are not going to be held to the same standard as the average guy on the street.”
After a firestorm of bad publicity over the Pilaa pollution case, the Ka Loko Dam breach, and the federal tax fraud allegations, Alan Pflueger in August 2013 changed the name of his dealership from Pflueger Honda to Pacific Honda.
Malia, do you know anything about Dennis Duban's sentence? Being the criminal mastermind behind all the tax evasion (according to Pflueger Snr & Jnr) it must be jail for quite a long period….?
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