Wednesday, July 30, 2014
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Poor Red’s: Prison, jail for Adamses

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MIKE AND BRENDA ADAMS, owners of Poor Red's in El Dorado, look at each other Friday before being sentenced to prison and jail.

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From page A1 | May 14, 2014 |

The owners of Poor Red’s Bar-B-Q in El Dorado were sentenced May 9 after nine months of continuances. One faces prison time while the other faces jail and probation.

The only factor that had been holding up the sentencing, announced Judge Douglas C. Phimister, was where Mike Adams would go — jail or prison — which hinged on the sale of the iconic bar. If the bar was sold within 120 days of sentencing, the prison time could become jail time. Prosecutor James Clinchard noted it had been nine months since Mike and Brenda Adams pleaded no contest to tax-related charges.

Adam Weiner, defense attorney for Mike Adams, noted that they were “on the verge of selling (the bar),” which drew laughs from the audience — made up mostly of former employees and El Dorado residents. He noted two “thick” appraisals had arrived that afternoon from the prosecution’s appraisers, something potential buyers were waiting for. He requested that the sentencing be pushed off again, or at least to give his client a turn-in date rather than be immediately remanded into custody.

Phimister denied the request, instead listing the charges against Adams, including filing false tax returns, failure to make contributions to unemployment, insurance fraud and failure to maintain Worker’s Compensation — more than 30 charges in all, eight of which had been pleaded to. A special enhancement of being an aggravated white collar crime with losses exceeding $200,000 had also been pleaded to, which excluded him from being eligible for probation.

The losses exceeded $1.32 million over six years, Phimister explained, from the Franchise Tax Board, Board of Equalization and California Economic Development Department. He said Adams “put employees in jeopardy,” not paying taxes on them or having Worker’s Compensation, ultimately hurting the community. If the property was sold, the prison time would be jail time instead. “Unfortunately, that did not occur.”

Clinchard added that Adams had “taken a landmark and run it into the ground.” It was not a victimless crime because it took money “out of the state coffers” that could be used to provide services and “truly affects everyone in the state of California.”

Phimister sentenced Mike Adams to a total of six years, eight months in prison with 216 days served and eligible for 50 percent credit. Restitution exceeded $600,000 plus fines and fees. He would be subject to post-release supervision for up to three years. He was then remanded to the custody of the El Dorado County Sheriff’s Department.

Adams’ wife, Brenda, was then the focus of the court. Phimister noted she would not initially be sent to prison. He reiterated to the court, “This was simply a case where the books were cooked.” Checks were cashed and the cash was immediately given back to the Adamses. He noted that Brenda Adams said, “mistakes were made,” and showed remorse.

Mark Ralphs, in defending Brenda Adams, said he echoed Weiner’s sentiments regarding the appraisals. He said it was part of the good faith effort to sell the bar, but no one would buy as they knew the prosecution was getting the property appraised, which would likely be a lower appraisal than the defense’s appraisals.

The prosecution was not required to do anything, Clinchard said, and their appraisal had nothing to do with the defendants trying to sell the property. He believed Brenda should receive the same sentence as her husband as her plea agreement hinged on the sale of the property, which had not happened. He noted the appraisal for the property by the prosecution was $700,000 and the money still owed on the property was also $700,000. Team Real Estate lists the selling price as $1.5 million.

Ralphs reiterated that “no savvy buyer” would buy the property without the prosecution’s lower appraisal — even if it was a wash for the Adamses.

El Dorado County Probation’s Stephanie Clark told the court that the department believed the Adamses were a “package deal” and they were to be sentenced the same way. She suggested that if Brenda was not sentenced to prison, she should receive a “Johnson year” in jail — a full 365 days, no credits, followed by probation.

Phimister told Adams that she could have signed the property over to the government, but she and her husband “wanted something out of this” and that they felt “entitled” when they could have simply walked away. He said that the actions of her and her husband had essentially made their employees into a “criminal organization.” He added of the Adamses, “I find their conduct outrageous.” The amount the property sold for was irrelevant, only affecting where Mike Adams would serve his time.

He then placed Brenda Adams on five years, eight months formal probation and a Johnson year in the county jail. Her restitution was the same as her husband’s, but 10 percent was added to what was owed to the FTB, BOE and California Economic Development Department each. Fines and fees were stayed for a year.

She was then remanded to the custody of EDSO amid the clapping of the audience.

Weiner and Ralphs had no comments after the hearing, though Weiner believed the bar would sell soon.

Melissa Labelle, a former employee, said, “Finally, finally justice is served.” Her husband, Frank, also a former employee, added that it was justice for those in the El Dorado community and his hope was for “Poor Red’s to get back to what it was.”

“Hallelujah,” chimed in former employee Mike Speegle Jr. “They are where they belong.” He said that their “criminal history has come to a screeching stop. They will no longer take advantage of the court or community.”

Debbie Gordon said the Adamses’ “dance of evasion” had ended and they must now face the consequences.

Speegle’s father added to Gordon’s comment that it seemed the Adamses would not be brought to justice in a timely manner and that it “paid to be a criminal.”

District Attorney Vern Pierson echoed Clinchard’s court statements. “White collar crime is not a victimless crime,” Pierson said in a press release. “The ripple effects created by those who commit fraud impact not only the company or employees who were scammed, but also have a devastating impact on business and society by creating unfair competition and raising prices and costs for everyone.”

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