SANTA ANA, California – A former resident of Orange County who now lives in northern San Diego County has been sentenced to 102 months in federal prison for tax evasion and charges related to his attempt to flee in 2013 on the eve of a trial on the tax charge.

Louis Joseph Vadino, 75, a Ramona resident who formerly lived in Lake Forest, was sentenced Monday afternoon by United States District Judge Andrew J. Guilford.

The sentencing follows a five-day jury trial in October that resulted in Vadino being convicted of tax evasion and making false statements to criminal investigators with the Internal Revenue Service. Prior to the trial, Vadino pleaded guilty to additional charges of failing to appear for court, conspiracy, two counts of passport fraud and two counts of aggravated identity theft.

The tax charge resulted from an audit of Vadino's 1999 tax return, which was completed in 2006 and led the IRS to demand $1.2 million in additional taxes.

Between 1999 and 2002, Vadino used the name of a shell company to purchase five residential properties in Lake Forest where Vadino, his three adult daughters and his mother resided. In the fall of 2006, after the IRS demanded payment of taxes related to the 1999 return, Vadino directed his daughter to obtain refinance loans on three of the Lake Forest properties and he sold a fourth Lake Forest property. These actions generated $2.1 million in loan and sale proceeds that were wire transferred to a Greek bank account that Vadino controlled.

From 2006 to 2011, Vadino took steps to evade paying the $1.2 million tax liability that included concealing the nature and extent of his assets, lying to IRS special agents and using offshore accounts to place funds and property beyond the reach of the IRS.

Vadino was initially indicted on tax evasion charges in 2012. On the eve of a trial scheduled to begin in 2013 and while he was free on bond, Vadino cut off his ankle bracelet and absconded. In October 2014, he applied for a United States passport with a stolen identity. Vadino was captured in December 2014 and has been in custody since then.

When Vadino was captured, “he was found with fake IDs, fake birth certificates, fraudulent passport applications, and a slew of other documents that made clear that he had planned to live as a fugitive in a foreign country,” prosecutors wrote in sentencing documents filed with the court.

In 2015, a federal grand jury named Vadino in a superseding indictment that added charges stemming from his flight from prosecution and efforts to assume a fake identity. He pleaded guilty to those post-flight charges, leaving for trial the tax evasion and false statement counts.

“This lengthy sentence brings to a close the prosecution of a defendant who went to extraordinary lengths to hide income from the IRS and then attempted to escape justice,” said Acting United States Attorney Sandra R. Brown. “While repeatedly telling the IRS that he had no money to pay his outstanding tax liability, he was buying cars, expensive model airplanes, and a nearly million-dollar home. While pending trial on the tax charges, he engaged in a series of calculated acts designed to avoid justice, which included obtaining a birth certificate, military discharge papers and a Veteran Affairs identification card to conceal his true identity. This conduct warrants the lengthy sentence imposed by the court.”

“Mr. Vadino hid assets from the IRS, was a fugitive from justice, and is now a convicted felon,” observed IRS Criminal Investigation Special Agent in Charge R. Damon Rowe. “The court's 102-month sentence demonstrates that lying to the IRS, tax evasion, and identity theft are crimes that impact all and come with serious consequences.”

At sentencing this week, Judge Guilford found that Vadino owes the IRS a total of $4.7 million, which includes taxes due in relation to his 1999 tax return, plus penalties and interest.

A second man – Steven Ness, 45, of Long Beach – was also charged, convicted and sentenced to over four months in prison for assisting Vadino in his attempt to obtain the passport with the stolen identity of Ness's father.

The investigation into Vadino and Ness was conducted by IRS Criminal Investigation. The case was prosecuted by Assistant United States Attorneys Daniel Ahn and Greg Staples of the Santa Ana Branch Office.

USAO – California, CentralUpdated April 20, 2017

Central District of California DOJ / 17084 / April 19, 2017