Case # 15CF2382
Date: May 13, 2016
BUSINESS OWNER AND HIS BOOKKEEPER ARRAIGNED ON CHARGES OF $1.5 MILLION TAX EVASION AND INSURANCE FRAUD SCHEME
SANTA ANA, Calif. – A business owner and his bookkeeper were arraigned today on charges of $1.5 million tax evasion and an insurance fraud scheme. Ronald Scott Dee, 63, Irvine, and Pamela Palmer Quast, 61, Santa Ana, are each charged with 28 felony counts of failing to file a return with intent to evade tax, 28 felony counts of willful failure to pay tax, 24 felony counts of willful failure to pay disability insurance deductions, six felony counts of misrepresenting facts to workers’ compensation insurance company, and sentencing enhancement allegations for committing a theft exceeding $100,000. Dee is also charged with two felony counts of willful failure to file or make fraudulent tax returns. If convicted, Dee faces a maximum sentence of 64 years and eight months in state prison and Quast faces a maximum sentence of 63 years and four months in state prison. They are out of custody on $350,000 bail and are scheduled for a pre-trial hearing on Aug. 17, 2016, at 8:30 a.m. in Department C-55, Central Justice Center, Santa Ana.
Dee is accused of operating Venetian Stoneworks, a tile and stone company in Irvine and Quast is accused of being the bookkeeper for the business. Between Jan. 1, 2006, and Jan. 31, 2013, the defendants are accused of underreporting their payroll to the insurance company, failing to report to the Employment Development Department (EDD) quarterly reports, failing to pay over withholding deductions, disability insurance, and disability insurance withholdings to EDD. Dee is accused of filing a fraudulent tax return with the Franchise Tax Board (FTB).
On Jan. 5, 2012, the Orange County District Attorney’s Office Bureau of Investigation began investigating this case after receiving a fraudulent activity report from the defendants’ insurance company. The defendants are accused of underreporting their payroll to the worker’s compensation insurance carrier in order to pay a lower premium rate for their insurance coverage.
Between July 17, 2009, and July 31, 2015, the defendants are accused of knowingly making false and fraudulent statements by underreporting their payroll to their insurance companies and failing to pay taxes to EDD. The defendants are accused of underreporting their payroll by nearly $2 million to the insurance companies.
Between 2006 and 2012, the defendants are accused of failing to report their employees withheld taxes totaling over $6.5 million to EDD. Dee is accused of keeping the taxed money which was meant to go to EDD. The defendants are accused of costing the State of California and various insurance companies over $1.5 million in loss.
The OCDA Bureau of Investigation, EDD, and FTB investigated this case.
Deputy District Attorney Debbie Jackson of the Insurance Fraud Unit is prosecuting this case.