Lake Forest Man Sentenced to Prison for $220,000 in Tax Evasion

The Lake Forest owner of a cleaning service was sentenced to a year in federal prison today for failing to report about $220,000 in income to the Internal Revenue Service, authorities said.

U.S. District Judge George H. King sentenced Sergio Villegas, 46, to the prison term after he pleaded guilty to the tax charge last year, Assistant U.S. Attorney Thomas D. Coker said. Villegas, the owner of Blue Line Cleaning Service in Orange, was also ordered to pay $220,000 in restitution to the IRS and a fine of $2,000.

"This sentencing serves as a reminder to all individuals and business owners that they risk prosecution if they intentionally conceal their income and fail to report it to the IRS,'' said Leslie P. DeMarco, the Los Angeles-based special agent in charge of IRS criminal investigations.

The plea agreement filed in Los Angeles federal court said that Villegas didn't deposit all of Blue Line's business checks received for cleaning and maintenance services between 2004 and 2006, according to the IRS. He instead diverted money from his business for personal use by taking checks payable to Blue Line, cashing them and depositing the funds in his own bank account.

The money that went ino Villegas' personal account rather than Blue Line's business account was not reported on the company's corporate tax returns or Villegas' personal return. Villegas also filed false and altered bank statements during a 2004 IRS audit of his personal tax return, according to the plea agreement.

City News Service reported this story.