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Poor Red’s owners arrested on tax charges

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LAW ENFORCEMENT from the Franchise Tax Board and Employment Development Department enter Poor Red's in El Dorado Wednesday morning to inventory items seized in an investigation of suspected tax fraud. Democrat photo by Shelly Thorne

By
From page A1 | April 19, 2013 |

Just after 9 a.m. on April 17, officers were beginning to take inventory at Poor Red’s Bar-B-Q in El Dorado after serving a search warrant. Elsewhere, a search warrant on the owners’ house was being served, with the owners having been arrested earlier in the morning.

“It’s an alleged underground economy case,” Franchise Tax Board spokesman John Barrett said, watching FTB agents coming in and out of the bar. “They owe several years of tax returns, both personal and business.” He noted they had also been paying employees in cash to avoid taxes.

According to a press release from the El Dorado County District Attorney’s Office, the tax problems go back six years, failing to pay nearly $350,000 in taxes.

The agents, mostly from the FTB, worked to clear the building. Two opened a small shed, used as a refrigerator, between the main bar and a parking structure with guns drawn. After opening it, they found a few kegs of beer. “It’s kind of like stacks of cash, but it’s beer,” one agent joked.

“Great job, long time coming,” yelled one passerby, clapping his hands.

The owners, Michael and Brenda Adams, were arrested earlier in the morning on more than 30 counts of tax evasion and insurance fraud, the DA’s press release announced. They are being held on $350,000 bail at the El Dorado County Jail.

The investigation and warrant service was carried out by the FTB, the DA’s Office, the Employment Development Department, the Board of Equalization and the El Dorado County Sheriff’s Department. The California Department of Insurance was also involved in the investigation.

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