SACRAMENTO, Calif. (AP) — The owners of a Southern California civilian test pilot school pleaded guilty Monday to defrauding the federal government of nearly $710,000 by filing a false tax return related to a secret Swiss bank account, and are expected to pay more than $2 million in civil penalties.
Prosecutors said Sean and Nadia Roberts of Tehachapi face up to three years in prison at their sentencing Sept. 6 after entering the guilty plea in U.S. District Court in Fresno.
They own and operate the National Test Pilot School, a nonprofit founded in 1982 at Mojave Airport that trains test pilots. They also own Flight Research Inc., which owns most of the aircraft used by the school.
Prosecutors, in court documents, call it the world's only civilian test pilot school. A school official once claimed it is the world's largest private test pilot training facility.
Their attorney, Edward Robbins Jr. of Beverly Hills, said the couple was caught up in the U.S. government's investigation of secret accounts at Switzerland's UBS bank. Under a deferred prosecution agreement in 2009, UBS admitted helping U.S. taxpayers hide accounts from the IRS and agreed to provide names of some customers.
"They had the unfortunate luck to be among the first 260 UBS customers who were turned over to the U.S. government," Robbins said. "Sean and Nadia Roberts, but for the fact that they were in the first 260, would have dodged any criminal liability and gone in under the civil settlement."
That settlement was offered to 4,500 other bank clients whose identities were disclosed later, he said.
He expects the couple may qualify for probation and no prison time because they promptly admitted their guilt and are cooperating with the investigation. They remain free on bail.
The couple pleaded guilty to the single count of filing a false 2008 tax return under a plea agreement. The lost taxes amounted to nearly $710,000, according to the agreement filed in federal court.
Prosecutors say the couple transferred money from their corporation to several offshore accounts, then improperly deducted the transfers from their corporate and individual income tax returns. They also failed to report interest earned on the foreign accounts.
Aside from repaying the $710,000, the couple agreed to pay a penalty on the rest of the money held in offshore accounts to settle a civil claim filed by the federal government alleging that they failed to properly report their income for tax years 2004-08. The amount of the penalty is to be set before sentencing.
"They're going to end up eating, I think, a $2 million penalty," Robbins said. "It will be in the neighborhood of 50 percent of $4 million."