Medina Pleads Guilty to Tax Fraud

Renato Medina, a casino owner in Colma, CA, is at the heart of a federal public corruption probe in California that has led to several arrests.^[1] Medina has admitted to cheating on his taxes and illegally deducting $2.6 million in personal expenses.^[2] Medina's niece and nephew, who were also arrested, have pleaded not guilty to helping Medina set up sham companies to help funnel casino revenue into Medina's personal holdings.^[3]

The public corruption probe also caught Colma’s former mayor who was sentenced to 18 months in prison in July after pleading guilty to accepting airline tickets from Medina while the casino had business pending before him.^[4]

Medina could face up to five years in prison when he's sentenced Feb. 28 for felony tax evasion.^[5] He has also agreed to pay $591,000 in back taxes after admitting listing home furnishings, a new Mercedes Benz and other personal luxuries as Lucky Chances Casino expenses.^[6]

The IRS is the only federal agency that can investigate potential criminal violations of the Internal Revenue Code.^[7] The Criminal Investigation Division of the IRS takes attempts to evade the tax laws of the United States very seriously. But the Investigation division is not limited to mere tax crimes; they can also pursue crimes such as money laundering and bank fraud.^[8]

Tax evasion is covered under 26 U.S.C. § 7201 and in that statute it states that it is a crime for any person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined not more than $100,000 ($500,000 in the case of a corporation), or imprisoned not more than 5 years, or both, together with the costs of prosecution.^[9]

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^[1] AP Staff, Colma casino owner pleads guilty to tax evasion, Associated Press Newswire, October 23 , 2007, available at LEXIS, News Library, Wire News Services File.
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] IRS, Criminal Investigation (CI) At-a-Glance, available http://www.irs.gov/compliance/enforcement/article/0,,id=108792,00.html (last visited October 23, 2007).
^[8] Id.
^[9] 26 U.S.C. § 7201(2007).