A San Francisco real estate developer who owns property in the
Gilroy area will serve 30 months in prison and pay a $50,000 fine
and $1.9 million in restitution after being sentenced Monday for
tax fraud.
A San Francisco real estate developer who owns property in the Gilroy area will serve 30 months in prison and pay a $50,000 fine and $1.9 million in restitution after being sentenced Monday for tax fraud.
Luke Brugnara, who also pleaded guilty Jan. 26 to poaching threatened steelhead west of Gilroy and to obstruction charges, likely will not be sentenced for those crimes until at least next month, U.S. Department of Justice spokesman Jack Gillund said.
Brugnara pleaded guilty in January to filing false tax returns in 2000, 2001 and 2002 and to obstructing the Internal Revenue Service. A federal indictment alleged that he had failed to report the sale of four properties in San Francisco and one property in Las Vegas. The indictment also alleged he had failed to report as income some personal expenses that had been paid to his corporation. Court documents also stated that Brugnara had provided a lender with invoices from a non-existent tax service as well as corporate tax returns and a statement that he owned more than $400 million of artwork – both of which had never been filed.
The maximum statutory penalty for each count of filing a false tax return is three years in prison and a fine of $250,000, plus restitution.
Judge William Alsup’s sentence in San Francisco came after a tumultuous legal process in which Brugnara twice pleaded guilty and then attempted to change his plea.
When Alsup this month denied Brugnara’s second request to alter his plea after his first request had been granted in 2009, he noted that the developer had been arrested on a complaint for threatening to kill witnesses in January just a few days before his trial was set to begin.
On Wednesday, Brugnara will be back in court to try to overturn his guilty plea for poaching-related crimes.
The developer admitted to four counts of “taking” steelhead and two counts of making a false statement in January after he was indicted by a federal grand jury in April 2008.
The real estate developer, who used his company, Brugnara Corporation, to purchase 112 acres, a cabin, four other structures and a dam in west Gilroy at 4850 Redwood Retreat Road, blocked the flow of Little Arthur Creek between January and April 2007 or longer, according to a federal indictment.
The creek is an important watershed for steelhead, according to the state Department of Fish and Game and the federal National Marine Fisheries Service. Regulators say that the habitat above the dam is critical to the breeding and survival of the South-Central California Coast steelhead, which are found in Little Arthur Creek and are listed as threatened on the federal Endangered Species list.
State and federal investigators said they found many trapped adult steelhead downstream of the dam that could not migrate upstream to a suitable spawning habitat. A rescue team, consisting of NOAA and Fish and Game representatives along with members of the local group Coastal Habitation Education and Environmental Restoration, noticed March 24, 2007, that fish that had been in the pool below the dam were gone.
Brugnara initially denied fishing for steelhead on his property after the rescue team said they found a pair of boots, footprints, a fishing line with hooks attached and two McDonald’s receipts with recent dates. However, he ultimately admitted that he been there and bought food in Morgan Hill along the way, according to a federal indictment. He also admitted that he and a friend had been fishing there, although he said they did not catch anything and used a fishing lure that would have prevented them from catching steelhead. The attorney general’s office said Brugnara lied about his intentions to catch fish and about the type of lure he used.
The maximum penalty for each false statement charge regarding the poaching is five years imprisonment and a $250,000 fine. The maximum penalty for each Endangered Species Act violation includes six months imprisonment and a $25,000 fine.
