A San Francisco real estate investor who allegedly poached
endangered fish on his Gilroy property has withdrawn his guilty
plea in a separate tax evasion case and will go to trial on both
matters early next year, according to federal court documents.
A San Francisco real estate investor who allegedly poached endangered fish on his Gilroy property has withdrawn his guilty plea in a separate tax evasion case and will go to trial on both matters early next year, according to federal court documents.
If convicted on all federal charges, Luke Brugnara could face up to three years in prison along with millions of dollars in fines for tax evasion and five and a half years for poaching endangered fish and making false statements to investigators – all of which he has denied. The poaching trial begins Jan. 25 and the tax trial Feb. 1, both in San Francisco.
The litany of charges stem from an April 2008 federal grand jury indictment. That document charged Brugnara and his seven companies with filing false claims and failing to report $45.5 million in gains from the sale of four San Francisco properties and one in Las Vegas, Nev., between 2000 and 2002. In May of this year, Brugnara pleaded guilty to not reporting $15 million in gains from the sale of two downtown San Francisco buildings in 2000. In exchange, U.S. Attorney Joseph Russoniello’s office dropped the additional tax charges. However, due to Brugnara’s change in plea, he will again face all charges, U.S. Attorney Spokesperson Jack Gillund said Friday.
Brugnara faced 18 months in prison after his guilty plea, but before the federal judge could hand down a sentence – which both parties had the right to appeal – Brugnara’s lawyer reversed course last month. That’s when Harris Taback filed a motion that he successfully argued in court earlier this week – that his client should be allowed to withdraw the plea because he offered it under “overwhelming stress and fear” related to both the tax and poaching cases, according to court documents.
The $15 million prosecutors claim Brugnara failed to report allegedly traveled through one of his companies, Brugnara Properties. In addition to the tax charges, Brugnara also filed Chapter 11 bankruptcy claims last winter on three of his companies: Brugnara Corporation and Brugnara Properties I and VI. As of Friday, federal documents showed creditors in all three cases have claimed nearly $85 million from the commercial property companies.
The Brugnara VI case has been dismissed, but the other two have converted to Chapter 7, according to federal documents. Chapter 11 usually precedes chapter 7 cases as the former allows a company to reorganize its debt and attempt to pay off creditors with future earnings. Chapter 7, also known as liquidation bankruptcy, usually applies to entities beyond restructure that must sell off assets to satisfy creditors.
Regarding the poaching matter, Russoniello charged Brugnara in April 2008 with damming part of Little Arthur Creek in early 2007 to trap steelhead, an endangered trout species. The waterway runs through Brugnara’s rural property northwest of Gilroy at 4850 Redwood Retreat Road. He bought the property in 2001 through Brugnara Corporation. As of Friday, records with the county tax assessor showed the property slipped into tax default in June.
Brugnara has always maintained his innocence in the steelhead case, which was the first federal criminal case in Santa Clara County charging someone with the poaching of steelhead. Open rivers are important to the species as the fish spawn in inland creeks before journeying to the Pacific.
